The second version of the first quarter GDP numbers were released this morning, and they mark the economy down to a 0.6% annual growth rate from the 1.3% rate estimated back on April 27. If that gets knocked down a little more when the “final” version comes out June 28, then ratcheted down even more in the benchmark revision a year or two from now, we may learn that the U.S. economy spent the first quarter of 2007 going backwards.
Or not. It will be a close call in any case, and at the moment most economic indicators seem to be back on the upswing. This slowdown may never meet the semi-official NBER recession standard of “a significant decline in economic activity.” But then, we just don’t seem to have recessions like we used to–sudden, wrenching downturns that throw millions of people (among them the occasional president) out of work but then are followed by surging recoveries. Instead we get mild recessions, disappointing recoveries, and booms that don’t really feel like economic booms to many or even most Americans (2005 and 2006 would fit that description, I think). The operating assumption among economists is that this way is better–the moderating of the business cycle over the past quarter century is considered to be a great accomplishment of American monetary policy. And maybe it is.
Update: Paul Lukasiak asks in the comments whether I consider the “Clinton economic miracle” to be a boom. Yeah, I guess 1997-1999 counts as a boom–but it was still more drawn-out and muted than the booms of the past. Real GDP growth hit 4.5% in 1997 and 1999 (it was 4.2% in 1998). Here are a few big growth years from olden times: