Three months ago the first government estimate of gross domestic product for the fourth quarter of 2004 came in at 3.1 percent at an annual rate. At the time, the market consensus expected 3.5 percent growth. Immediately, the mainstream media started talking about an economic slowdown. Turns out, that 3.1 percent was finally revised up to 3.8 percent.
This past week, the Commerce Department reported its initial estimate for first quarter GDP at 3.1 percent. The consensus forecast was 3.5 percent. Immediately, newspaper headlines screamed about a soft-patch and the likelihood of further economic decline. Sound familiar?
Well, history is repeating itself â€” even though, if you look under the GDP hood, youâ€™ll find that the countryâ€™s economic engine is humming along. (Read more…)