On Friday, we might know whether there’s a reason Janet Yellen is acting concerned.
A couple of weeks ago, the Federal Reserve chair backtracked on her threat to continue aggressively raising interest rates. She hinted that rate hikes — of which there have been four in two years — would be coming more slowly than the Fed indicated.
Rate hikes are already coming at a glacial speed. Why is Yellen slowing them down even more?
That’s what the world was thinking, not me. I think Yellen is scared that the economy is about to crap out.
Not that it’s been going like gangbusters to begin with, but there was certainly hope back in January when President Trump was inaugurated that the economy in July would be going a lot better than it actually is.
I set Friday as the day to check in on the economy via-à-vis Yellen’s stance, because that is when the Commerce Department will announce its first guess at how the nation’s economy fared in the second quarter. (And that’s what it is, a “guess” based mostly on estimates.)
The first quarter’s gross domestic product — which is the gauge most people use to measure economic activity — grew at an annualized rate of 1.4 percent.
Remember, that’s an annualized gain. To find out how much actual growth there was in the first quarter, you have to un-annualize it by dividing 1.4 percent by four — for each of the quarters of the year.
That makes actual first-quarter growth 0.35 percent. That means the economy was barely moving forward.
The New York Federal Reserve thinks Friday’s second quarter GDP number will improve to an annualized rate of growth of 2 percent — or 0.5 percent for the quarter.
The Atlanta Fed’s second-quarter GDP guess is 2.5 percent annualized.
Both are way down from earlier projections. Wall Street’s consensus is for 2.6 percent second-quarter growth annualized.
Not one of those estimates is great.
The Trump White House is looking to boost annual growth to 3 percent — a…