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Saturday, September 29, 2012

Latest GDP Revision Carries a Mixed Message for the Election: Economy Weak, but Corporate Profits Strong

The revised third estimate of GDP for Q2 2012, released Thursday by the Bureau of Economic Analysis, carries a mixed message for the election campaign.

The revised data show real GDP growing at an annual rate of just 1.3 percent in Q2, down from the already weak 1.7 percent of the previous estimate. The slowdown supports the GOP contention that the economy as a whole remains weak despite the Obama team’s efforts.

At the same time, corporate profits after taxes grew faster than previously estimated. They continued to grow faster than the economy as a whole and remain near the all-time highs reached later last year. Taxes paid by corporations actually fell in the second quarter while total profits grew. All of those data bolster the Democratic narrative that corporate managers and shareholders are doing quite nicely, thank you, while the rest struggle. True, economic policy needs a tune-up, but are tax cuts for wealthy “job creators” really what we need most? >>>Read more

Follow this link to view or download a classroom-ready slideshow with charts of the latest GDP and profits data

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