Why Do People Do This? Assessing the Current Macroeconomic Situation Weblogging
Philadelphia Federal Reserve President Charles Plosser, February 11, 2014:
The economy is on firmer footing than it has been for the past several years. So let’s look at some of the details of how last year ended and the implications for the coming year. Real output grew at a 3.2 percent annual pace in the fourth quarter of last year, following a 4.1 percent growth rate in the third quarter. That means economic growth doubled in the second half of 2013 compared with the first half…
But it was clear on February 11 that that 3.2 percent annual pace was being revised downward–and indeed it was today, to 2.4%/year. And it was clear on February 11 that the best estimate of the first-quarter number was around 1.6%/year.
The best estimate we had of the current pace of growth of the U.S. economy on February 11 was the same as our best estimate now: that the U.S. economy is growing at a 2.0%/year averaging the current and the just-past quarter, 2.7%/year averaging three quarters, 2.6%/year averaging four quarters, and 2.4%/year averaging five, 2.1%/year averaging six.
There is no way calling people’s attention to the 3.7%/year growth average of late 2013 was, on February 11, the right thing to do…