My wife's and my stimulus was spent on overdue bills, so if they count that as helping the economy, good luck!! G.D.P. Grows at Tepid 1.9% Pace Despite Stimulus
By MICHAEL M. GRYNBAUM
Published: August 1, 2008
http://www.nytimes.com/2008/08/01/business/01econ.html?hp<<snip>>
Gross domestic product expanded at an annual rate of 1.9 percent in the second quarter, the Commerce Department reported, primarily because of a surge in export sales powered by the weak dollar. The government’s tax stimulus package pushed consumer spending higher, but the ongoing pain in the housing market took a sharp toll on overall growth.
But that figure was below the estimate of many economists, who had expected growth of 2.3 percent, and it cast doubt on whether the stimulus package would be able to prop up the economy in the months ahead.
<<snip>>
More troubling, however, was news that the economy actually shrank in the last three months of 2007, by 0.2 percent. It was the first time that the economy had contracted since the third quarter of 2001. The government had originally reported growth of 0.6 percent in that quarter.
<<snip>>
On the other hand, much of the expansion stemmed from the nearly $100 billion of tax rebates that were released in April and May, part of the government’s stimulus plan intended to prop up the ailing consumer. So far, the government has no plans to issue a second stimulus package.
Retail sales were much higher in June on account of the rebates, as Americans returned to retail stores and bought more goods, although often at a discounted price. Some economists have said that the larger number for consumer spending, which accounts for more than two-thirds of the overall gross domestic product, will drop steeply in July, August, and September, which could cause a significant decline in next quarter’s growth.
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