Projected GDP growth downgraded to 2.8%

Thanks to Brad DeLong, we notice this from the Wall Street Journal blog (my emphasis):

Another shoe drops: Worse-than-expected durable-goods orders in April pushed Macroeconomic Advisers to cut their forecast for second-quarter GDP growth to 2.8% from 3.2%.

As the article observes, the slowdown case is gathering steam (ok, having fun with metaphors here).

Remember — GDP growth of 2.5% is one of our magic numbers. That's the number needed to keep the current rate of unemployment stable. DeLong comments:

Time to PANIC!!: Second-Quarter Real GDP Growth Looks Slow Enough to Put No Upward Pressure at All on the Employment-to-Population Ratio

And that's just his headline. Paul Krugman adds:

Last year I warned that we seemed to be heading into the “Third Depression” — by which I meant a prolonged period of economic weakness[.]

Click the link to see what "Third Depression" means and what shape it could take. Suffice it to say, hard times ahead. If you can, plan accordingly.

GP