The Eternal Recurrence of Q1 National Accounting Statistics

When you read this story about horrific Q1 GDP plunges keep in mind that even though the data is new, this is actually data about old news, about the first quarter. The first quarter started in January and ended at the end of the March. Everyone reading this blog was alive back in January, February, and March and we remember that the economic situation was terrible then. There was incredible panic, it seemed the international financial system might fall apart, the legislative prospects for fiscal stimulus in the United States were unclear, etc.

Because it takes time to compile accurate statistics, when something obviously terrible happens you then, some time later, get these kind of after-shocks—data releases quantifying exactly how terrible things were. But this isn’t really new information. Nobody was sitting around yesterday saying “the global economy was in good shape back in Quarter 1.” The optimistic case is that some time during Quarter 3 we’ll get the data about Quarter 2 (i.e., April, May, and June) and that data will say that Quarter 2 wasn’t as bad as Quarter 1. And then some time during Quarter 4, the Q3 data will come out and say that we had growth in Q3. But the data itself is a lagging indicator simply because it takes time to assemble the data.

That said, as Larry Mishel’s “Sounding the Alarm” presentation makes clear, even this relatively optimistic scenario looks pretty grim. Look at what’s happening to child poverty, for example:

This is not good. Children who grow up in poverty tend to suffer from diminished school achieved and reduced economic opportunities throughout the entirety of their life. Even during relatively good times, the child poverty rate in the United States was scandalously high, and it’s getting much higher.

Whenever I mention child poverty I like to mention Half in Ten, a CAP-affiliated campaign to reduce child poverty by 50 percent. Though I suppose they had the lower, pre-recession baseline in mind, so I’m not sure exactly how this impacts their plan.