National University System Institute for Policy Research

(858) 642-8498 Get Started

Health check: U.S. economy @ midyear

Roger Showley, U-T SAN DIEGO

Friday, July 4, 2014

View Article

Kelly Cunningham, National University System
Answer: GDP decline

Although I anticipated lackluster growth for the year, the actual 2.9 percent decline in first quarter GDP was a surprise. Even with higher growth to be reported for the second quarter (the eventual third revision in three months will also likely be less than stellar), it will be hard to overcome such a high drop for the first half of 2014. The weakness cannot all be attributable to weather. Larger factors are the implicit tax hikes implemented under Obamacare, which amount to the third highest tax increase since 1946. Uncertainties over energy prices are also contributing to stagnating economic momentum.