U.S. GDP skyrockets… how our struggling nation managed to double economic growth
But government includes a quiet revision… economy contracted last year for first time since the tech bust
Ahead of tomorrow’s jobs report, one employment indicator that’s tellin’ it like it is!
Stock market stages solid rally, famous stock picker calls for the bottom
Finally, someone musters the stones to sue the ratings agencies
Plus, The 5’s hit a nerve… the population control debate flares up in our 5 Min inbox

U.S. economic growth doubled in the second quarter of 2008, says the government today. Doubled… as in twice as much.

That’s what the bean counters claim this morning… the latest GDP report shows the U.S. economy grew at a 1.9% annual rate in the second quarter, more than double the anemic 0.9% growth rate in the first quarter. Word on the street is that stimulus checks and a better-than-usual trade deficit were behind the sudden boost. How the printing of $150 billion in free money and our $400 billion annual trade deficit cause economic growth… well… this editor doesn’t get it.

You’d think Wall Street would rejoice on the news, but economists were expecting an even higher GDP reading. Just two weeks ago, the consensus forecast for today’s report came in around 1.8%. Somehow, expectations grew to 2.3% by this morning (what country do these people live in?), and thus, the Street is in a sour mood today. More on that in a minute.

But there was one believable nugget in today’s GDP report. The Commerce Department quietly “unannounced” GDP growth in the last quarter of 2007. The government revised previous reports of 0.6% fourth-quarter growth down to a 0.2% contraction.

That’s the first quarter of “negative growth” since the third quarter of 2001, when the economy was in recession.

“The story now will go along the lines,” speculates John Williams , “that the economy dipped a little in the fourth quarter — not enough to be called a recession — and has been in recovery ever since. Despite sharp quarterly contractions in employment, industrial production, new orders, real retail sales and residential construction, among other series, the second-quarter 2008 GDP was reported as booming. (Net of inventory reductions, the inflation-adjusted economy expanded at an above-average annualized 3.9% rate.)

“Such is an absurdity, given the reporting of better-quality surveys and extremely strong anecdotal evidence to the contrary. But the reporting will enable the pushing off of any recession recognition until after the election.”

While economic growth in the U.S. is reported to be strengthening, the U.S. employment scene, as John mentioned, is still lousy. A healthier GDP report this morning may have overshadowed the exceptionally bad weekly jobless claims report. Initial jobless claims over the last week alone skyrocketed by 44,000, to 448,000, claims. That’s the worst such report since 2003. For what it’s worth, the four-week moving average is a monthly gain of around 393,00 claims.

We’ll get the “official” jobs report from the Labor Department on Friday. Today’s jobless claims stand in stark contrast to yesterday’s positive ADP report… we’ll see where the government draws the line to

http://www.shadowstats.com/