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Oops! Economic Growth Wasn't So Great After All
CNBC ^

Posted on 04/26/2013 5:42:42 AM PDT by Perdogg

U.S. economic growth regained speed in the first quarter, but not as much as expected, which could heighten fears the already weakening economy could struggle to handle deep government spending cuts and higher taxes.

(Excerpt) Read more at cnbc.com ...


TOPICS: Breaking News; Business/Economy
KEYWORDS: gdp; obamasfault
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1 posted on 04/26/2013 5:42:42 AM PDT by Perdogg
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To: Perdogg

Unexpected!!!


2 posted on 04/26/2013 5:44:19 AM PDT by Numbers Guy
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To: Perdogg

Stand by for Recovery Summer 4.0!


3 posted on 04/26/2013 5:46:51 AM PDT by neodad (USS Vincennes (CG-49) Freedom's Fortress)
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To: Perdogg

Amazing, since the majority of earnings reports show losses in the top line (revenue). Only continuing cost cutting made it possible for companies to meet estimates on the bottom line (earnings per share), which means they cut employment and did not invest in new equipment etc. No economy grows with that burden, and ObamaCare hasn’t kicked in yet.

What a disaster Obama has brought on our economy!


4 posted on 04/26/2013 5:47:50 AM PDT by txrefugee
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To: Perdogg
Economy growing at a breathtaking 1.5%.

Hang on tight everyone!

5 posted on 04/26/2013 5:49:30 AM PDT by skeeter
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To: Numbers Guy

The media yawns.


6 posted on 04/26/2013 5:51:57 AM PDT by corlorde (forWARD of the state)
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To: Perdogg

DAMMIT~!!DAMMIT~!!DAMMIT~!!DAMMIT~!!DAMMIT~!!DAMMIT~!!DAMMIT~!!DAMMIT~!!DAMMIT~!!DAMMIT~!!DAMMIT~!!DAMMIT~!!DAMMIT~!!DAMMIT~!!DAMMIT~!!DAMMIT~!!DAMMIT~!!DAMMIT~!!DAMMIT~!!

DEEP GOVERNMENT SPENDING CUTS ARE WHAT IS NEEDED - not the pitiful, miniscule, Washington-style “cuts” (a smaller increase)


7 posted on 04/26/2013 5:52:50 AM PDT by Mr. K (There are lies, damned lies, statistics, and democrat talking points.)
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To: Numbers Guy

No, no, it clearly states: “not as much as expected”.

They’re working hard not to use the word they always use!


8 posted on 04/26/2013 5:52:54 AM PDT by 1010RD (First, Do No Harm)
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To: Perdogg

...deep government spending cuts... DEEP?


9 posted on 04/26/2013 5:52:58 AM PDT by Hostage (Be Breitbart!)
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To: Perdogg

Government lingo translated for the low info voters:

Spending cuts = INCREASES in Govt spending this year will not be as much as we once planned.

Deep Cuts = Reduction of spending increases that we will make sure you notice as punishment for making us plan to reduce the amount of increase in our spending of your tax dollars.


10 posted on 04/26/2013 5:59:20 AM PDT by Tenacious 1 ("The British are Coming (to confiscate weapons)" - Paul Revere (We know how that ended))
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To: skeeter
Economy growing at a breathtaking 1.5%.

The biggest problem with that is: the velocity of money, which the Fed is dumping into the markets combined with the Govt's deficit spending is enough to generate a 3 to 4% growth rate on its own. So, absent this money, the economy is actually contracting at an alarming rate.

11 posted on 04/26/2013 6:01:10 AM PDT by RobertClark (My shrink just killed himself - he blamed me in his note!)
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To: skeeter

1Q13 GDP was up +2.5% though that was well below the 3.0% consensus estimate.


12 posted on 04/26/2013 6:03:10 AM PDT by Wyatt's Torch (I can explain it to you. I can't understand it for you.)
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To: Wyatt's Torch

1% of that was replenishing inventories.


13 posted on 04/26/2013 6:06:22 AM PDT by skeeter
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To: skeeter

Real personal consumption expenditures increased 3.2 percent in the first quarter, compared with an increase of 1.8 percent in the fourth. Durable goods increased 8.1 percent, compared with an increase of 13.6 percent. Nondurable goods increased 1.0 percent, compared with an increase of 0.1 percent. Services increased 3.1 percent, compared with an increase of 0.6 percent.

Real federal government consumption expenditures and gross investment decreased 8.4 percent in the first quarter, compared with a decrease of 14.8 percent in the fourth. National defense decreased 11.5 percent, compared with a decrease of 22.1 percent. Nondefense decreased 2.0 percent, in contrast to an increase of 1.7 percent. Real state and local government consumption expenditures and gross investment decreased 1.2 percent, compared with a decrease of 1.5 percent.


14 posted on 04/26/2013 6:08:48 AM PDT by Wyatt's Torch (I can explain it to you. I can't understand it for you.)
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To: RobertClark
I heard yesterday that the government is changing the way they report GDP to include government "R&D" spending, and this will have the effect of increasing the figure by 3%.

Any truth to this?

15 posted on 04/26/2013 6:08:59 AM PDT by skeeter
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To: Perdogg
...heighten fears the already weakening economy could struggle to handle deep government spending cuts and higher taxes.

What?

16 posted on 04/26/2013 6:10:00 AM PDT by hattend (Firearms and ammunition...the only growing industries under the Obama regime.)
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To: skeeter
heard yesterday that the government is changing the way they report GDP to include government "R&D" spending, and this will have the effect of increasing the figure by 3%. Any truth to this?

That's true, but it's not skewing this number since they backed the info into the old numbers for a more fair comparison.

17 posted on 04/26/2013 6:10:52 AM PDT by old and tired
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To: old and tired

How far back?


18 posted on 04/26/2013 6:11:28 AM PDT by skeeter
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To: Perdogg

"What difference does it make?"

19 posted on 04/26/2013 6:12:57 AM PDT by Arrowhead1952 (President Bush took the war on terror to them, and 0 bummer brought it to our soil.)
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To: skeeter
Yes, it is true. The manner in which the GDP is calculated will be changed to include things such as R&D, film royalties, and all manner of other nonsense. It will have the effect, literally, of rewriting economic history. It will affect everything.

A little known bit, however, is WHY this change is taking place. Well, I can tell you: The U.N. Yes, that U.N. They developed a new UNIVERSAL system that all nations are to convert to, with the US being one of the first. Link Here

20 posted on 04/26/2013 6:15:18 AM PDT by RobertClark (My shrink just killed himself - he blamed me in his note!)
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To: skeeter

My understanding is that the rewrite goes all the way back, but when I saw your question I looked for confirmation of that to post a link and couldn’t find one. I did hear them talking about it a good bit on CNBC this week.


21 posted on 04/26/2013 6:16:31 AM PDT by old and tired
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To: Perdogg

Thank goodness for the new statistical methods to figure GDP starting in July. Growth will be back and good times here again for all.


22 posted on 04/26/2013 6:18:19 AM PDT by ChildOfThe60s (If you can remember the 60s.....you weren't really there)
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To: skeeter

Calculated Risk:

Personal consumption expenditures (PCE) increased at a 3.2% annualized rate, and residential investment increased 12.6%. However equipment and software increased only 3.0%, and non-residential investment in structures declined slightly.

“Change in private inventories” added 1.03 percentage points to GDP in Q1 (reversing most of the decline last quarter), and the Federal government subtracted 0.65 percentage points (mostly a decrease in defense spending). State and local governments continued to decline.

This was below expectations of a 3.1% growth rate, but domestic demand was decent with PCE and private investment increasing. I’ll have more on GDP later ...


23 posted on 04/26/2013 6:18:43 AM PDT by Wyatt's Torch (I can explain it to you. I can't understand it for you.)
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To: hattend

Look at post 14. It contains the data on government spending decreases.


24 posted on 04/26/2013 6:19:49 AM PDT by Wyatt's Torch (I can explain it to you. I can't understand it for you.)
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To: old and tired

There is no way they would make that change and not adjust all periods.


25 posted on 04/26/2013 6:20:33 AM PDT by Wyatt's Torch (I can explain it to you. I can't understand it for you.)
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To: skeeter

Drudge has link showing 2.5%


26 posted on 04/26/2013 6:21:38 AM PDT by newfreep (Breitbart sent me...)
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To: skeeter
Zero Hedge

Overhyped Q1 GDP Grows By Only 2.5%, Biggest Miss To Expectations Since September 2011

Less than an hour ago we speculated that "it wouldn't be surprising for GDP to come substantially weaker than expected, only to be revised higher (or lower) subsequently." Sure enough, we have gotten at least the first part right for now, with the advance Q1 GDP number printing a very disappointing 2.5%, on expectations of a 3.0% increase, up from 0.4% in Q4, and the biggest miss since Q3 2011. The reason for the big miss: Inventory and Fixed Investment came well below expectations, comprising 1.03% (of which autos represented 0.24%) and 0.53% of the 2.5% annualized increase GDP. Kiss the great CapEx investment story goodbye.

The only silver lining in today's otherwise very weak report: Personal Consumption Expenditures, which were a sizable 3.2% versus the 2.8% expected, and amounted to 2.24% or virtually all of the net Q1 GDP growth. So far so good .The bad news, however, is that this number will not sustain into Q2 and look for expenditures to plunge in the coming quarter. Finally, let's not forget that it rained like 5 days in March, so there's that. And of course, very soon, all GDP will be revised to add intangibles, so in retrospect Q1 GDP will likely have grown by a Ministry of Truth blush-inducing 10% or so.

And for those confused why the spending spree led "recovery" won't last, the answer is simple: the US consumer is out of money, as can be seen by this savings (or lack thereof) rate chart.

Source: BEA

27 posted on 04/26/2013 6:23:27 AM PDT by Wyatt's Torch (I can explain it to you. I can't understand it for you.)
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To: Perdogg

The economy is “struggling because of deep government spending cuts”???

#1- Have there been real cuts in spending? Or are the increases less than liberals desire?

#2- And government needs to spend even MORE than Obama has been doing to get the economy out of the dumps? Really?


28 posted on 04/26/2013 6:26:03 AM PDT by Alex in chains
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To: skeeter; old and tired
How far back?

"We are carrying these major changes all the way back in time - which for us means to 1929 - so we are essentially rewriting economic history," said Mr Moulton.

29 posted on 04/26/2013 6:27:57 AM PDT by 1rudeboy
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To: Alex in chains
WSJ:

Five Takeaways from Today's GDP Report:

The U.S. economy grew at a rate of 2.5% in the first three months of 2013 –much better than the 0.4% growth rate at the end of 2012, but well below economists’ expectations. Experts are still digesting today’s report, but here are five initial takeaways.

Consumers look strong. The New Year greeted households with a one-two punch of higher taxes and rising gas prices, but consumers seem to have shrugged off the hit to their wallets. Consumer spending rose at a 3.2% rate in the first quarter, the best pace since late 2010. Spending rose especially quickly in durable goods, longer-lasting items like cars and dishwashers, and another big jump in the construction sector provided further evidence that the housing market rebound is real. Imports rose too, which detracted from economic growth, but is another sign domestic demand is strong.

Businesses, less so. If the consumer sector gained momentum in the first quarter, businesses lost ground. Spending on equipment and software, a proxy for business investment, rose at a 3% pace, down sharply from 11.8% at the end of 2012. Investment in industrial and transportation equipment actually fell, as did spending on structures like stores and factories. One bright spot: Exports rose, a sign of strength amid a shaky global economy.

Government remains a drag. Falling public-sector spending continued to pull down growth, falling at a 4.1% rate, the ninth decline in the past ten quarters. The drop was concentrated in the federal government, in particular defense, where spending fell at an 11.5% rate. That followed a massive 22.1% pullback in defense spending in the fourth quarter.

Watch the trend. The first quarter’s 2.5% growth rate may have disappointed economists, but it still marks a reasonably healthy growth rate, especially compared to the end of 2012. Economists caution that 2013’s early strength was at least partly a rebound from the artificially low growth rate at the end of 2012 — businesses built inventories very slowly in the fourth quarter, then had to build them back up to start the year. But the slow fourth-quarter inventory number was itself a reaction to an unusually strong build-up in the fall. Average all three quarter together and the economy is growing at a 2% rate.

But worry about the future. The first quarter’s reasonably healthy growth was driven largely by the consumer sector. That could spell trouble going forward. After-tax income fell sharply in the first quarter, meaning consumers had to save less to spend more. That can’t continue forever, especially after the still-shaky job market slowed again in March. Falling gas prices and rising real estate and stock markets should help prop up consumers, but there are already signs that spending slowed in March.


30 posted on 04/26/2013 6:30:22 AM PDT by Wyatt's Torch (I can explain it to you. I can't understand it for you.)
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To: Mr. K

Those in power have different goals than you do.


31 posted on 04/26/2013 6:31:04 AM PDT by MrB (The difference between a Humanist and a Satanist - the latter admits whom he's working for)
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To: Perdogg
just what i expected, at least i'm still unemployed right?
32 posted on 04/26/2013 6:39:05 AM PDT by Drawn7979
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To: Perdogg

Media and Obama preparing “Boston Terror Attacks” as reason for 2nd Qtr GDP, when it fails to meet expectation.


33 posted on 04/26/2013 6:52:48 AM PDT by PGR88
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To: skeeter

http://www.athenaalliance.org/pdf/PolicyonIntangibles-Torino.pdf

Note: See page 3 for list of “Intangibles” to be included in GDP total. This report was from May 2009, so the change has been planned for a while. They know what is going on, and what’s ahead. They just need to cover it up by ‘rewriting history’


34 posted on 04/26/2013 6:52:54 AM PDT by griswold3
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To: Alex in chains

—— The economy is “struggling because of deep government spending cuts”??? ———

Insane, stupid, or ignorant?

In most cases, with reporters, I suspect it’s ignorance. I’ve never seen a reporter demonstrate an understanding of basic economic principles.

The other half of the problem is that that THINK they’re knowledgeable. I blame diplomas for this. It’s just like The Wizard of Oz.


35 posted on 04/26/2013 6:57:03 AM PDT by St_Thomas_Aquinas
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To: St_Thomas_Aquinas

More hope for a fool than a man who is wise in his own eyes.


36 posted on 04/26/2013 6:57:41 AM PDT by MrB (The difference between a Humanist and a Satanist - the latter admits whom he's working for)
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To: Hostage
...deep government spending cuts... DEEP?

6% across the board to non-defense, 9% across the board to Defense, which translated to a 13% reduction because it fell in middle of the fiscal year.

Yes, deep. The "2%" cut you hear Sean Hannity spinning is not accurate, because 63% of all spending is on Entitlements, and they are exempt from Sequestration. That means 37% of the rest (non-mandatory spending) took 100% o of the cuts. For Defense, it is much worse - they are 17% of the overall budget, yet they absorb 50% of the cuts by law.

I GUARNANTEE you that is Social Security checks were cut 6% or 9%, people would be SCREAMING that those were deep cuts.

You know that as well.

37 posted on 04/26/2013 7:04:23 AM PDT by SkyPilot
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To: Alex in chains
#1- Have there been real cuts in spending?

There have been REAL CUTS in Defense spending. There were $487 Billion in cuts (over ten years) that started two years ago, and that was before Sequestration kicked in with another $650 Billion in cuts.

Put another way, this is not a baseline budget gimmick for Defense - there are LESS real dollars (much less) in the budget than in previous years.

Again, REAL cuts.

And it is going to get worse for the military (a Constitutional enterprise, by the way).

I cannot speak for other agencies.

38 posted on 04/26/2013 7:08:17 AM PDT by SkyPilot
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To: Tenacious 1

See post #38.


39 posted on 04/26/2013 7:09:27 AM PDT by SkyPilot
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To: Perdogg

Bush’s fault?
Still?
soooo, let’s spend more money we ain’t got.


40 posted on 04/26/2013 7:09:31 AM PDT by Joe Boucher ((FUBO))
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To: Perdogg

Associated Pravda story this morning claims 2.5 percent growth rate. These liars can’t even get their stories straight.


41 posted on 04/26/2013 7:16:43 AM PDT by Colonel_Flagg (Blather. Reince. Repeat.)
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To: neverdem; narses; Wyatt's Torch

Oh, come on now.

Savings ain’t all that bad!

Heck, I got all of 43 cents last month from mah $10,000.00 dollars in that there savings account!


42 posted on 04/26/2013 7:20:59 AM PDT by Robert A. Cook, PE (I can only donate monthly, but socialists' ABBCNNBCBS continue to lie every day!)
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To: Wyatt's Torch
Good morning.

I'll take a +2.5% annualized. And yes, you missed your prediction, but so what? Growth is growth (even if you take out the Fed QE whatever's 1%).

You do good work/commentary.

And no, I haven't analyzed the data yet, and probably won't until the initial estimate is revised in a few weeks.

5.56mm

43 posted on 04/26/2013 7:24:24 AM PDT by M Kehoe
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To: SkyPilot
You remind me of Willie Green.

/johnny

44 posted on 04/26/2013 7:28:05 AM PDT by JRandomFreeper (Gone Galt)
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To: SkyPilot

Well I don’t watch TV anymore, haven’t done so for years. So don’t know don’t care what Hannity has to say about anything. I know he still affects new viewers to conservative perspectives which is good but in sum he’s not much use to seasoned conservatives.

I think all the cuts you are referring to are cuts to programmed increases and not baseline budgets. So if the programmed increase for fiscal year was 3% the for example a 6% cut to a 3% increase leaves a 2.82% increase.


45 posted on 04/26/2013 7:30:55 AM PDT by Hostage (Be Breitbart!)
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To: M Kehoe

Thanks. And don’t forget the all important third and final revision... ;-)


46 posted on 04/26/2013 7:32:25 AM PDT by Wyatt's Torch (I can explain it to you. I can't understand it for you.)
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To: txrefugee

Very good statement on quarterly earnings.

The news focus is on profits.

But revenues? Down for most part.

GP and EPS growth is good news to the stockholders (and nothing wrong with that).

But jobs and economy growth come from the top line. And this quarter was terrible for revenues.


47 posted on 04/26/2013 7:55:38 AM PDT by bluecat6 ("All non-denial denials. They doubt our ancestry, but they don't say the story isn't accurate. ")
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To: FReepers; Patriots; FRiends




Please Support Free Republic Today



48 posted on 04/26/2013 8:14:39 AM PDT by onyx (Please Support Free Republic - Donate Monthly! If you want on Sarah Palin's Ping List, Let Me know!)
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To: Perdogg

*rolling eyes*

They always do that and we ALWAYS fall for it! What is it that they say about insanity? hmmmm?


49 posted on 04/26/2013 8:15:40 AM PDT by LUV W (All my heroes wear camos!)
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To: Perdogg
Bush's Fault!

Sequester's Fault!

50 posted on 04/26/2013 8:23:53 AM PDT by magellan
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