Slower growth, for now

WASHINGTON — The U.S. economy barely grew in the fourth quarter although a slightly better performance in exports and fewer imports led the government to scratch an earlier estimate that showed an economic contraction. Gross domestic product expanded at a 0.1% annual rate, the Commerce Department said on Thursday, missing the 0.5% gain forecast by analysts in a Reuters poll. The growth rate was the slowest since the first quarter of 2011 and far from what is needed to fuel a faster drop in the unemployment rate.

THE Bureau of Economic Analysis just released its second estimate of GDP growth for the second quarter, and the pace of expansion was revised down, from 1.3% to 1.0% (a bit worse than the revision to 1.1% that was expected). The 0.4% first quarter growth estimate wasn't changed, which means that for the first half of 2011 the American economy expanded at a 0.7% pace. That's below the rate of population growth, which is to say that in per capita terms output continues to shrink.

THROUGH the first half of the year, one factor after another weighed on the American economy, disappointing forecasters (and workers) who'd been looking forward to 4% or so GDP growth. Patience, countenanced Ben Bernanke; when these temporary factors—bad weather, high petrol prices, seismic disasters, and so on—eased off, growth would bounce back. But as the months wore on, it seemed like temporary negative factors might be dragging down expectations and threatening to set of another summer swoon.

LOOK almost anywhere in the recent economic data and the signs point to an accelerating recovery. A solid fourth quarter GDP report contained a truly blockbuster increase in real final sales. Manufacturing activity is soaring. Consumer spending is up and the trade deficit is down. Markets are trading at their highest level in over two years. And so economists anxiously awaited the first employment figures for 2011, hoping that in January firms would finally react to better conditions by taking on lots of new help.

THE Bureau of Economic Analysis just released its second estimate of GDP growth for the second quarter, and the pace of expansion was revised down, from 1.3% to 1.0% (a bit worse than the revision to 1.1% that was expected). The 0.4% first quarter growth estimate wasn't changed, which means that for the first half of 2011 the American economy expanded at a 0.7% pace. That's below the rate of population growth, which is to say that in per capita terms output continues to shrink.

DID India grow faster than China last year without anyone so much as noticing? Many pundits, including this newspaper, have speculated about when India's growth might outpace China's. (The debate even spawned a meta-debate in India about whether the debate was worth having.) So it would be ironic if the moment had already come and gone, without any fuss, fanfare or felicitation.

How does the Administration's forecast of the levels of real GDP compare against those of the CBO, and the Blue Chip and Wall Street Journal surveys?