Double Dip? New GDP Numbers Demonstrate Economic Recovery Losing Steam

The U.S. Commerce department said earlier today that the latest estimate of economic growth through the 2nd Fiscal Quarter showed a growth rate of less than 1.4%, down considerably from the estimated growth of 2.4% as had been reported a month ago. Combined with the horrible housing numbers that came out earlier in the week, this is the sort of news that right-of-center media outlets will pounce on, particularly with the mid-terms looming in just over two months.

According to Breaking News at MSNBC.com:

The Commerce Department said Friday that its latest estimate of U.S. economic growth from April through June, as measured by the gross domestic product, or GDP, showed a very modest annual rate of 1.4 percent, down from an initial estimate of 2.4 percent reported one month ago.

Later Friday, Wall Street will watch closely a speech by Federal Reserve Chairman Ben Bernanke at a conference in Jackson Hole, Wyo. Investors will want to hear not only Bernanke’s view of the economy, but also what options he thinks the Fed still has to help the recovery regain momentum. It’s widely believed, however, that the Fed has little room to maneuver as interest rates remain near zero.

As Newsbuster’s reported yesterday, CNBC’s Jim Cramer made this dire prediction (which can be seen below.) Jeff Poor reports:

According to CNBC “Mad Money” host Jim Cramer, it will and in a big way on Aug. 27, when the new gross domestic product numbers are released. On CNBC’s Aug. 26 broadcast of “Street Signs,” Cramer predicted dismal numbers during his “Stop Trading” segment, which has been contrary to the way the market reacted.

“Look, I’m going to give you my forecast right now – I think we’re going to get 0.5 percent GDP, OK?” Cramer said. “But, let’s say we get 0.5 percent GDP. Everyone’s going to say it’s horrible. We’re going to go track down economists, Nobel winners who think it’s a double dip. And it’ll be like shocker – 0.5 percent. And I’m telling you it’s going to be 0.5 percent. It’s like the housing number. On my show I said it’s going to be declined 50 percent. We get 30 percent. It was like shocker. Whoever is making these estimates is just so wrong because you know, you piece these pieces together on a daily basis like I do and come up with something between zero and 1 percent growth.”