There's an old saw about the of economists is to make weather forecasting look good. The Commerce Department just reported this morning that in the first quarter the gross domestic product () of the country grew at an annualized rate of 2.5%, substantially below economists' estimates of 3.2%. And looking past the headlines, real (inflation-adjusted) final sales rose just 1.5%, the smallest increase in two years. In addition, much of the relates to businesses restocking their inventories and consumers continuing to spend beyond their means. Both of these will end shortly.

In , those chastened economists who missed the call are now reconsidering what might happen in the next three months with some of them already predicting GDP growth at less than 2%. That 2%, by the way, is the number the Federal Reserve watches. It considers anything under 2% as “stall speed.” What the Fed might do about it is another story – probably nothing.

Several things mitigate against any kind of economic resurgence. The payroll tax increase is continuing to take a bite of between $60 and 80 a month from every paycheck. Gasoline prices, although declining slightly, are still taking substantial bites out of those paychecks which, by the way, haven't shown any real improvement in purchasing power for nearly a decade. The only way consumers can continue to spend is through credit cards and reducing their which has dropped from 4.7% last year to just 2.6% so far this year.

The alleged rebound in the masks two things: that market is much smaller than it used to be, and the overhang of homes underwater remains huge. In addition, banks simply aren't lending. Fed policies mitigate against them taking risks in making when they can keep their reserves at the Fed which is paying them something without any risk. And then there's job growth, which dropped off a cliff last month.

The GDP report, then, is hardly good news.

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