Posted on 03/28/2015 3:17:44 PM PDT by expat_panama
(excerpt from) Something weird is going on in the US economy, and it's not good...Despite experiencing a healthy pace of job growth, the US economy has largely disappointed economists' expectations by delivering a series of weaker-than-expected economic reports.The unexpected plunges in retail sales and durable goods orders stand out as they reflect weakness in both consumers and businesses. On Wednesday, Bloomberg LP Chief Economist Michael McDonough tweeted a chart of the unprecedented divergence between job growth and retail sales growth. This is concerning as personal consumption accounts for roughly 70% of US GDP. It's particularly concerning considering all of the extra spending money Americans supposedly have thanks to falling gas prices. "Recent US data have been disappointing," Goldman Sachs Kris Dawsey said late Thursday. Dawsey thinks GDP growth could tumble to 1.4% in Q1 from 2.2% growth in Q4 of last year. Economists had previously expected GDP growth to accelerate in Q1 to around 3%. Q2 Comeback?
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--is that (1) this "weird" stuff really is happening, (2) but not the way BI said, and (3) it's actually a good thing.In the first place BI's numbers are real and true. However the article uses them to support the belief that we got "...plunges in retail sales... ...the unprecedented divergence between job growth and retail sales growth." Reality is that for years now we've not seen falling sales and rising employment, we've had falling employment and climbing sales.The 'misunderstanding' (a kind way of saying "deceit") was caused by allowing monthly changes in jobs'n'sales to pass for what's really going on with jobs'n'sales. Reality is that the actual cumulative increase in sales since the recession, is really a 15% climb, while total employment's dragged up a meager one percent. Job stagnation looks even worse when we take into account population growth over the period --17 million more people is a 6% expansion that shows how our 1% employment increase is truly inadequate. But we digress. But as long as we're digressing how about we also remember that this so-called 15% boom in sales ignores inflation and population growth. Taking those factors into account we find that real per capita sales is down 5% from the pre-recession high and remember that for decades Americans had been enjoying continuous sales growth-- OK so the economy sucks but that's still not the point. The BI writer (he holds a BA in Religion from Boston University) screwed up by passing on the idea that the drop in sales was an "unprecedented divergence" along with a the graphic that circled an era going back years. Coming back to the Planet Earth the divergence that we do have does not span "years". It's been going on now more like for a couple months. Hey, remember that everyone says "size doesn't matter" so let's be happy with what we got because there're a number of reasons why falling sales and rising employment can even be good for us. For starters it means that people are getting back to work and they're saving for hard times ahead. Americans. Ya can't beat 'em. Another reason is that the past few years of stagnant jobs and rising sales has only been possible because of the rise of spending by the elite wealthy. Whoa --we're not going into some goofy income inequality shtick because equal incomes is what Marx advocated. Bad idea. Our problem is that until recently the risk has been a separation between the rich and poor --an opportunity deficit that threatened to close the book on America's success stories. These past few months offer reassurance that wealth class structure is not that solid after all. Finally my take is that at the very least falling sales --while short term pain-- can be a 'wake-up-call' for the policy wonks that don't know or don't want admit the economy sucks. They might even get off our backs and let us get back to work... |
Sounds dreamy! This year’s visit will just be a one night stop as we’re quick hopping around seeing all the kids. Would dearly love to relive my hometown longer sometime...
Sounds beautiful —having grown up w/ snow but learned driving a car in L.A... Somehow to me “heavy snowfall” still just means “no school”.
Envy causes cancer, and they always die a horribly lonely and painful death.
Snow is beautiful when you live in Panama, not so much close-up. : )
Maybe not, my wife was raised in Galveston & has absolutely no desire to live in snow, but somehow all I can remember emotionally is the magic and fun. When I think about it I have to admit that most of the time snow was grey and black with dirt and slush, and sidewalks were icy while the ground was soggy. Doesn't matter, I still miss it.
The markets are shrugging off the 0% GDP. Here is a tidbit. My BIL is starting a new company. He was meeting up with the big cruise lines. Because of the strong dollar, the switched 40% of food purchases from the US to Europe.
Never saw that study but I believe it. Envy is not only a sick hateful perversion but it's an evil pride before our Creator. I'd comment on how much the left likes to indulge in it but I need to breath into a paper bag for a bit first...
Been hearing that but last week's report from the BEA had the final number at 2.2%, same as was reported last month. Many people are talking about more slowing down but today's factory orders are up +2.2% (market expected -0.5%) and before that consumer confidence lept to 101.3% when analysts were expecting it to fall to 96.4%.
It's taken 8 years but things really are improving in places.
A worthwhile read.
http://blogs.wsj.com/totalreturn/2015/04/02/are-you-overlooking-big-threats-to-your-finances/
Apr 2, 2015
Are You Overlooking Big Threats to Your Finances?
By Jonathan Clements
There are two ways that wealth can slip away: slowly and quickly.
Today, many folks are well aware of the slow erosion caused by high fund expenses, hefty advisory fees and big investment-related tax bills, as evidenced by the growing enthusiasm for exchange-traded funds, robo advisers and tax-loss harvesting.
My fear: While investors are focusing on these relatively modest drags on their annual investment returns, they may be overlooking big gaps in their financial plan that could quickly destroy the savings they have accumulated.
We are talking here about mistakes such as failing to buy life, health and disability insurance; holding a badly diversified investment portfolio; wagering on one or two heavily mortgaged rental properties; or betting big on stocks when you dont really have the stomach for it.
snip
Not to worry, everyone can go back to bed because the markets are closed for Good Friday. I know, this year the federal government's ignoring it and the Unemployment rate's coming out (as if anyone could care) but for the rest of us it's a 3 day weekend.
Wishing everyone a very special Easter!
Back to bed!?!?!? Doncha know MONEY NEVER SLEEPS, PAL!!
lol!!!
jeesh...
glad it is closed today. with the jobs report today it would have probably been another down day.
hard to say; futures had started upbeat and my take is that serious people have long since given up on the headline unempl. rate. As it is we added 34M jobs and 277M to the “not in the labor force”. That has to mean something.
“Wishing everyone a very special Easter!”
Thank you Expat, and same to you.
What are your thoughts about the fallout from the probable Iran ‘deal’? In particular oil, the US Dollar, and defense contractors like Lockheed and Raytheon?
Seems to me the ME just got a lot more dangerous, especially for Israel.
imho it’s a total wild card —probably amounting to nothing but HUGE downside potential all over the place. That’s also what I’m getting from the pundit/analysts too, that nobody’s got a clue here —but one thing for sure is it’s important and I’ll have to include it in the next week’s tread —tx!
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