Posted on 04/27/2018 1:39:08 PM PDT by SeekAndFind
The U.S. economy slowed in the first quarter as consumer spending grew at its weakest pace in nearly five years, but the setback is likely temporary against the backdrop of a tightening labor market and large fiscal stimulus.
Gross domestic product increased at a 2.3 percent annual rate, the Commerce Department said in its snapshot of first-quarter GDP on Friday, also held back by a moderation in business spending on equipment and investment in home building.
The economy grew at a 2.9 percent pace in the fourth quarter. Economists polled by Reuters had forecast output rising at a 2.0 percent rate in the January-March period.
The first-quarter growth pace is, however, probably not a true reflection of the economy, despite the weakness in consumer spending. First-quarter GDP tends to be sluggish because of a seasonal quirk. The labor market is near full employment and both business and consumer confidence are strong.
Economists expect growth will accelerate in the second quarter as households start to feel the impact of the Trump administration's $1.5 trillion income tax package on their paychecks. The tax cuts came into effect in January.
Lower corporate and individual tax rates as well as increased government spending will likely lift annual economic growth to the administration's 3 percent target, despite the weak start to the year.
Federal Reserve officials are likely to shrug off tepid first-quarter growth. The U.S. central bank raised interest rates last month in a nod to the strong labor market and economy, and forecast at least two rate hikes this year.
(Excerpt) Read more at cnbc.com ...
> despite the weak start to the year.
Compared to what in the previous decade?
I laugh at the fed. The biggest impact on inflation is interest rates handed down by the fed itself.
Raise those rates and everything costs more, and there is economic pressure to blunt GDP growth.
Business is impacted, jobs are impacted, the GDP is impacted, and federal and state tax receipts are impacted.
They can’t let Trump fix this nation. They will fight him tooth and nail with all the power they can muster.
Thanks Obama!
CNN desperately trying to find something negative to say.
1st quarter is always the weakest quarter. Trump 2.3% 1st quarter is growth better then all but 3 of Obama WHOLE YEAR GDPs. And is in .03% of 0’s best year.
There is a lot to undo from 0 and Bush 2.
I’m by no means an expert on the Fed, but raising interest rates doesn’t shrink the money supply. It may shrink expansion from here on. If so, I’m not convinced that is good.
We ABSOLUTELY HAVE TO INCREASE federal tax receipts. Government spending has a centrifugal force just like our vehicles do on a freeway. When a situation comes up, it’s very hard to stop on a dime. When we can, just boosting the gas a little with the pedal, can allow us to bypass trouble.
Increase the GDP, increase the fed tax receipts.
Slam on the (interest rate) brakes, and we stand a very good chance of one of those 15 mile bumper to bumper accidents, only in this instance it would be tens of thousands of miles of backed up languishing businesses.
If we have excess fed tax receipts, we pay down debt.
If we have fewer fed tax receipts, the public and the national debt will be savaged.
Restricting the monetary supply will raise the effective buying power of each remaining dollar. Raising interest rates will also make savings accounts pay more. All this can put brakes on growth, but when everything was flat out the other way and we never had growth, we have to pay the piper going back to normal.
0 really, really squandered our country’s future and present day. It was his intent, and he did really well in his execution.
I will say tariffs are a viable tax route that can net help the US. Forget what people say when stating “we won’t export as much.” It will be a net near equal, because tariffs don’t tax products US companies make in China that are sold everywhere BUT the US.
Lets say you have a cash flow problem in your home. With the current salary or job, you can’t keep up. Yes you can cut back, but you can only cut back so much. At some point you come to the place where you have to make more money.
Okay, you’re bringing in $60k per year. You’re still spending about $500.00 per month more than you are bringing in, even after cutting your expenses to the bone.
You can either cut necessities, or you can ask your boss for a $500 dollar or more per month raise.
The tax cuts will increase our federal tax receipts. No, you and I may not see the cuts we would have desired. We have a right to become vocal about that.
Under Reagan tax cuts doubled tax receipts. If spending had merely been kept in check, this should have resulted in the government taking in more money than it was spending, and the surplus could have gone toward reducing the dept.
If the tax receipts under Trump do double, and if spending can be kept in check, Trump will be able to reduce our debt.
As that debt reduces at some point he will also be able to cut our taxes more, which will result in still more federal tax receipts.
As for the Fed not having impact on tax receipts, you’re missing a very important point. Businesses expand through loans. If the Fed has raised the prime rate, it impacts businesses decisions. Is this new interest rate something we can afford as we expand, or not?
If businesses don’t expand, they don’t make more widets that raise revenue when they are sold. At the same time, new people are not hired, because the cost of expansion was deemed too prohibitive.
Yes, the Fed can tank the economy. That’s why a lot of folks are angry that a fed who didn’t raise rates once during Obama’s tenure, announced before Trump even took office that it was going to raise them plenty under his administration.
What’s more, the Fed did this after 15 years of malaise, no growth, no expanded jobs, no expanded tax revenues.
It came up with the idiotic idea that it would fight Trump when it came to economic expansion. It’s doing it’s best to kill Trump’s impact on the economy.
Yes, we both want to see the money supply contract. What’s the best way to see that. Expanding federal tax revenue or retarding economic growth, which will result in shrinking federal tax revenue.
Not touched on, was the fact Trump has to cut spending. He has done that by putting Black and Hispanics back to work. If you’re not paying out to support the poor, you not only have no outlay, you also have tax receipts where you had none.
Further, Trump and his crew is looking hard at Welfare, and are looking like they are going to heavily impact that $600 billion a year mammoth blood sucker.
Trump is doing his job, everything he can, and the Fed is doing it’s best to thwart his abilities.
We prayed to get a guy like Trump in there, and now the Fed wants to blunt the progress.
I hold a very dim view of what the Fed is doing. It isn’t helping. It’s making matters worse, by adding more hurdles to retard expansion and growth.
If it wasn’t for QE 1,2,3 and Trillion dollar deficits; the Obama years would have seen negative growth. They were running Keynesian policies on steroids and cocaine and still just limped along.
The figures showed that durable goods orders fell yet again. Something is holding us back and no one seems to know what it is. I wonder if we will be able to get to 3% again.
Whatever happened to the 4 or 5 percent we were expecting?
NO ONE, but brain dead Never Trumpers trying to spread their ignorant “Hate Trump always” propaganda, ever said anything about “4-5%” growth in 2018.
It’s obvious; the “affordable” health care act has sucked all of the disposable income out of the economy.
Unexpected!
'They were running Keynesian policies on steroids and cocaine and still just limped along.'
We still are. At least Keynes said we would have surplus in the good years.
I am not a never Trumper but Trump pledged a 4 percent growth repeatedly during the presidential campaign and into his presidency. He was so sanguine that he predicted it may rise even higher at the presidential debate in October 2016. “We’re bringing [the Gross Domestic Product] from 1 percent up to 4 percent,” he said. “And I actually think we can go higher than 4 percent. I think you can go to 5 percent or 6 percent.”
I heard him say it several times and I, unlike quite a few here on FR, was an anti-Cruzer and was pulling for Trump from the very beginning. I am not a zombie though, I hold him to his word. I fully expected 4% but he still has a while to go in office so it should be possible. I am also disappointed in how slow the drain is going along with that idiot Sessions and also the delay in the wall - I admit to being impatient though.
During the Reagan administration, my personal hero by the way, the American economy went from a GDP growth of -0.3% in 1980 to 4.1% in 1988 (in constant 2005 dollars), averaging 3.4% annual growth in constant dollars. This reduced the unemployment rate by 1.6%, from 7.1% in 1980 to 5.5% in 1988. Trump has exceeded the unemployment by much more and I hold great hope for the other. I was just hoping it would happen this year.
You forgot your sarcasm tag
Yeah.
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