Will Barack Obama become the first president in the post-World War II era during whose term real gross domestic product never grew in any quarter at an annual rate greater than 4 percent?
With less than optimistic recent forecasts from the Federal Reserve System's Federal Open Market Committee and the Congressional Budget Office, it now seems like a very real possibility.
Having been inaugurated in January 2009, Obama has served as president in 10 quarters. Without doubt, he came into office in a severe recession. In three of the quarters of 2008, according to the U.S. Bureau of Economic Analysis, real GDP grew at a negative annualized rate, dropping as low as -8.9 percent in the fourth quarter of that year.
At the beginning of Obama's term, real GDP remained negative in the first two quarters, hitting -6.7 percent in the first quarter of 2009 and -0.7 percent in the second quarter.
But two full years have passed since then. During that time, real GDP peaked in the first quarter of 2010, hitting an annualized rate of 3.9 percent.
Since that modest peak a year and a half ago, the economy has been on a generally downward trend, with growth of real GDP hitting a dismal 0.4 percent in the first quarter of this year and a nearly as dismal 1 percent in the second quarter.
Now both the FOMC and the CBO are indicating they do not expect vigorous economic growth to resume any time soon.
"The Committee now expects a somewhat slower pace of recovery over coming quarters than it did at the time of the previous meeting and anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate," the Federal Reserve Board said Aug. 9 in a news release. "Moreover, downside risks to the economic outlook have increased."
The CBO predicted last week that unemployment will remain above 8 percent until more than a year after the next presidential inauguration -- which will take place Jan. 20, 2013.
"With modest economic growth anticipated for the next few years, CBO expects employment to expand slowly," the CBO said. "The unemployment rate is projected to fall from 9.1 percent in the second quarter of 2011 to 8.9 percent in the fourth quarter of the year and to 8.5 percent in the fourth quarter of 2012 -- and then to remain above 8 percent until 2014."
Previous post-World War II presidents who have seen the economy contract while they were in office have also seen the economy come roaring back.
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