Posted on 06/09/2014 1:02:53 PM PDT by blam
Joe Weisenthal
June 9, 2014
Goldman's top economist, Jan Hatzius, just said the words we've been wanting to hear for five years.
He believes the economy is now growing at an above-trend pace.
Goldman's own proprietary current activity indicator (CAI) is showing its fastest growth since the crisis, and though he acknowledges that some of the strong May activity is the result of a snapback from a tough winter, he says that even without that snapback we're still growing at a strong rate.
Here's his statement:
Despite the 1% drop in real GDP in the first quarter, we believe that the US economy is now growing at an above-trend pace. The best way to see this is via our current activity indicator (CAI), which grew at an annualized rate of 3.4% in May, similar to the average of the prior two months. Although an estimated ½ percentage point of this sequential growth is due to a bounceback from the weather distortions of the first quarter, even the year-on-year CAI now stands at 2.7%, the fastest pace of the expansion so far and above our estimate of potential growth of 2%-2½%. In our view, the CAI is a far more reliable indicator of economic activity than real GDP because it is more timely, more broadly based, less noisy, and less subject to revision.
One key reason why we expect a further pickup in the underlying growth pace to 3%+ is an improvement in the housing sector. The impact of the 100bp increase in 30-year mortgage rates last summer should now be mostly behind us; in fact, the 40bp drop in rates since the start of the year could provide a modest boost in coming quarters. More fundamentally, we are optimistic on household formation.
(snip)
(Excerpt) Read more at businessinsider.com ...
Did anyone doubt Obama?
You thought he was just playing golf, eh?
Hahahahaha! [gasp] Hahahahaha!
All is well and good!
ok
Well, I guess I’ll have to eat my words. Hard to believe the guy who parachuted in to get bin Laden is out there creating jobs one at a time with his bare teeth. What a guy!
Time to man the boats the BS is too deep for the waders.
Looks like we dodged a bullet. Close one.
I’m gonna go out and buy a Harley to celebrate. I think I’ll get all the chrome stuff too.
Happy Days are here again! EBTs for EVERYONE!!
Economists refer to “trend” growth as the amount of GDP expansion that the economy can enjoy without triggering shortages of labor or materials that would lead to an inflationary spiral taking hold.
In other words trend growth is the sustainable speed limit of the economy, and the sweet spot for growth where there is a reasonable balance between the supply and demand for labor.
Clap along if you feel like a room without a roof..
Goldman Sacs HQ is where the golden calf now resides.
Nasty people.
Certainly. The mortgage lending rules are easing. Car commercials for those with “no credit or bad credit” are back on the air. People are starting to use their homes as ATM machines again. I mean what’s not to love?
Then again, people are probably mortgaging their homes just to buy food, but who’s really keeping score anyway?
Stock market is going to hit 17,000. The EBT cards are still turned on. It’s a freakin’ worker’s paradise out there!
Dog whistle for Goldman’s connected. Buy now and dump it as soon as the election is over. Obama will blame republicans for the mess and the MSM has two years to pump up Hillary who will fix it.
The market is betting on Republicans winning the Senate. The crash will come if they don’t.
LOL!
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