The headline for Greg Ip’s piece in The Wall Street Journal pretty much says it all:

In a Slow Economy, Negative Quarters Shouldn’t Surprise

No, they shouldn’t. But their frequent occurrence without the economy formally falling into recession is dispositively symptomatic of a slow economy. When economic progress is running at a sound 3.5% GDP growth year-on-year, a one quarter slowing of growth rate by, say, 1.5 per centage points—a common enough occurrence in an economy—would drop GDP’s year-on-year number to 2%. On the other hand, when economic progress is bumping along at that anemic 2% for its longer term, a 1.5 point drop takes growth to near zero. In the workaday volatile world of economics, a quarter’s slowing by 2 or 2.5 points—less common, but far from unheard of—moves the year-on-year number to outright shrinkage from merely slowed growth.

As this year’s first quarter GDP “growth”—a negative 0.7%–illustrates, coming as it does on a string of 1st quarter negative numbers and coupled with lots of quarters of less than 2% growth, here we are six years after the Panic of 2008 in a still slow economy.

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