Fresh off of the anemic 2016 Q1 GDP 0.5% on an annual basis, which translate to 0.125% “growth” for the first quarter, comes more dire news for the US.
The Federal Reserve in July will have a major benchmark revision of GDP going back the last 5 years. The revised numbers will show that the Fed’s own Industrial Production data is weak enough to mark that the US economy is in a recession. The revised data is lower quarter-over-quarter and year-over-year, which has never happen since the IP benchmark was created by the Fed almost a 90 years ago, without the US being in a recession.
This will explain why most Americans feel worse off than they were prior to the “Great Recession.” While the Obama Administration has ballyhooed a recovery, the revised IP data shows that growth is below 2007 levels.
I am sure this revision last month probably prompted Fed chief Janet Yellen to be called to the White House to meet with President Obama and Vice President Biden.
How this plays out for the election is critical. Look to see Democrat Hillary Clinton move away from continuing “The Obama Miracle” economic model and start crafting a different tack.
The announcement of a recession would certainly give Republican Donald Trump a big boost coming out of the conventions in July as well.