With all the QE3-ing and home-constructing going on recently, it’s tempting to think that our national economy is back, baby.
But today’s GDP revisions, which revealed that our economy grew only 1.3 percent in the second quarter, compared to a previously estimated 1.7 percent growth, say otherwise.
Durable goods orders — a measure of how many cars, toasters, cell phones, and other non-consumable products U.S. manufacturers are selling — also fell, with the biggest drop since January 2009. The slowdown is particularly visible in industries like auto manufacturing and aviation. According to Reuters, “Boeing received only one aircraft order in August, down from 260 in July.”
QE3 — the major bond-buying program announced by the Federal Reserve earlier this month — should help some, but if demand continues to be weak, we could continue to get disappointing numbers for many more months, no matter how effective the program is.
One reason for the drop in GDP is this summer’s major drought, which cut into farm inventories and added to problems elsewhere in the economy. The drought stayed severe through July and August, which means it’s likely to affect Q3 numbers as well.
So, in summary, in order to speed our incipient economic recovery, farmers — buoyed by plentiful rainfall — need to start buying Boeing jets. Get on that, farmers.