Posted on 01/29/2010 8:17:05 AM PST by GOP_Resurrected
Real GDP boomed in Q4 and suggests continued strong growth in 2010. If this is a "weak recovery" or "the new normal," please give us more. The primary reason for the V-shaped recovery is that monetary policy has been extremely loose the past couple of years and, with the normal lag time, is now having a huge impact on the economy. The "siege" is over, but some pessimistic analysts seem to have caught a case of "economic Stockholm Syndrome," afraid to admit improvement.
Although inventories accounted for a large share of growth in Q4, this was due to fewer inventory reductions, not an actual increase in goods on the shelf. As a result, inventories will continue to add substantially to growth in 2010. Meanwhile, final sales (GDP excluding inventories) have increased three quarters in a row and the increases have accelerated each quarter.
Notice what has not accounted for recovery: government spending. Government was a drag on the economy in Q4 and only added 0.3 points to the real GDP growth rate in 2009, no different than the long-term average. On the inflation front, GDP prices increased at only a 0.6 percent annual rate in Q4. However, prices for the things we buy (gross domestic purchases) increased at a 2.1 percent rate. Nominal GDP (real GDP growth plus inflation) is now up 0.8 percent versus last year and will be going up quickly over the next few quarters. This means zero-percent interest rates are too low and, therefore, inflationary.
In other news this morning, the Chicago PMI, a measure of manufacturing in the Midwest, increased to 61.5 in January versus 58.7 in December, bucking a consensus-expected decline. In particular, the employment index increased to 59.8, the first positive number since 2007 and the highest level since 2005. This supports the forecast that payrolls increased in January.
— Bob Stein is senior economist with First Trust Advisers.
I have no idea why you’re talking like these figures are true. The economy is not improving.
to paraphrase Ronald Reagan, right?
You don’t have to possess a Nobel in economics- just look at the empty malls and tell me the economy is recovering. Even the supermarkets here are ghost towns except on payday.
I suspect, as do many other commenters, that Q4 GDP numbers will be revised down, as have others recently. Q3 state and local sales tax receipts remain strongly down (http://www.rockinst.org/pdf/government_finance/state_revenue_report/2010-01-07-SRR_78.pdf), and until these figures and others start to show improvement, I'm not ready to join the recovery cheerleading. We all want to see it, but it isn't here yet, and a possible surge in energy prices triggered by continued cold in the northern hemisphere could act as a further drag.
Yeah, a lot of americans are getting tired of hearing the weatherman continue to say the flooding is subsiding as they see the water continue to rise in their living room.
After a while, you decide to trust your own lying (or not) eyes.
A most excellent rant my FRiend! Well said!
The comparison is equivalent to the same thing the MSM and Zer0's boys have been pumping on job losses....."we lost less jobs than last month - by a whopping (insert number here)....all the while the total number of out of workers increases steadily. Meanwhile the Treasury is printing twenties so damn fast they can't even get the print evenly aligned on the paper (take a look at some...)......
Then we get the news that the only public hospital in the Memphis area is going to have to close their doors, putting all those doctors, nurses, aides, techs, and janitors out of jobs, because Tenncare, (obamacare light) can't pony up $50M. http://www.freerepublic.com/focus/f-news/2440036/posts
This isn't the first cuts Tenncare has had to make, because it is unsustainable.
CBO Director Testifies to Congress: The Economy is Going To Get MUCH WORSE:
http://www.freerepublic.com/focus/f-bloggers/2440278/posts
I'm sorry I have no intention of donning a tin foil hat and screaming, "books are cooked!"
It was stupid and paranoid when the left did it to Bush and it remains so now. The BEA are professional statisticians, not political appointees.
Did you even the read the actual article, or just title? The title is very sloppily worded because the the testimony was that the BUDGET picture is going to get much worse, not overall economic health. Direct quote:
Unfortunately, CBO expects that the pace of economic recovery in the next few years will be slow.
"Economic recovery" does NOT equal "getting worse," which precious few of the Eyeores around here will admit that the GDP contraction of the recession is even over. It said "growth" will be "slow" and that the UE rate will continue to rise, EXACTLY as it did after the 1991 recession and 2001 recession. Jobs were stagnant or shedding, then hiring resumes, then previously discouraged and unemployed workers rejoin the workforce. As they eventually get hired then the UE rate FALLS.
Hey noob, you wait, this will prove to be a false. It will be adjusted down in the coming weeks.
Get outta here, troll.
I’m a “troll?” Why? Because I post an economic assessment from a SUPPLY SIDE economist off of NATIONAL REVIEW, for crying out loud?
I’m sorry, I’m about facts and I’m not gonna pretend facts aren’t there just because some on my side see it as a convenient political bludgeon.
Anti-Obama, PRO-faith in the U.S. economy. Seems to me those who aren’t are more the pretenders to conservatism.
You go ahead and fool yourself. No skin off my nose. The timing is questionable. Don’t you think?
And the permabears will ALWAYS have another excuse for why good news is actually bad. It’s what they do.
Go right ahead and follow their advice. Don’t invest and buy gold. It’s a recipe for being broke and unhappy.
Figure it out, his join date is Nov, 2009. Does the word troll mean anything to you. Either that or he simply doesn't want to face the facts that this country is screaming down the hill headed for a monumental crash.
The simple fact of the matter is that it's impossible for an economy that's shedding jobs, losing businesses, increasing office vacancies, dropping housing starts, floating foreclosures and tapped-out on credit, to grow 5.7%.
Impossible.
These figures will be adjusted downward...just like the previous ones, and any gains will be attributable to market corrections as opposed to actual growth.
You might want to work on your bona fides a bit before spewing blarney at everyone with an opinion that's different from yours.
Then please explain to me why the exact same "jobless" phenomenon happened twice before? Indeed, why in every last postwar recovery there is a period of GDP growth BEFORE job loss stops and resumes growing? The 1991 recovery went on for a year before payrolls started to gain. The 2001 recovery took until August of 2003, before payrolls started growing again.
Your logic of, "Well, if people are still losing jobs, then consumers won't buy and investors won't invest so things must still be bad" were true, then every single recession would be self-perpetuating until the economy collapsed. History shows us it just doesn't work that way.
Housing starts are what they are because of the enormous remaining oversupply of housing from the boom. You seize on one bad month and ignore the longer-term trend.
• Existing home sales fell 16.7% in December to an annual rate of 5.45 million, coming in below the consensus expected pace of 5.90 million. Existing home sales are up 15.0% versus a year ago.
• Sales were down in every major region of the country. The decrease in sales was due to decreases in both single-family homes and sales of condos/co-ops.
• The median price of an existing home increased to $178,300 in December (not seasonally adjusted) and is up 1.5% versus a year ago. This is a huge improvement since January, when prices were down 17.5% versus the prior year.
• The months’ supply of existing homes (how long it would take to sell the entire inventory, at the current sales rate) increased to 7.2 from 6.5 in November. The increase in the months’ supply was all due to the slower pace of sales. Inventories declined for single family homes, but slightly increased for condos/coops.
The drop in closings is a temporary hangover from the homebuyer tax credit, which many thought was going to expire in November. A lower number was expected and is consistent with the recent decline in pending home sales. But even with this ugly number there were some important silver linings in the report. The level of sales still remains higher than it ever was before 2001. Even better, inventories continue to decline, falling to 3.29 million, the lowest level since March 2006. Although the months’ supply of homes increased, this was all due to a slower pace of sales. Meanwhile, home prices are also showing resilience coming in at $178,300, 1.5% higher than a year ago, and the best year-ago comparison since 2006. We still believe home sales have hit bottom and will continue in an upward trend for three reasons. Home prices are much lower than they were four years ago, interest rates remain extremely low and potential homebuyers should expect modest price gains in most of the country over the next couple of years. In other news this morning, the Dallas Federal Reserve Index, a measure of manufacturing activity in Texas, increased to +8.3% in January, the eleventh consecutive increase and the highest level since mid-2007.
http://www.ftportfolios.com/Commentary/EconomicResearch/2010/1/25/existing_home_sales_fell_16.7percent_in_december_to_an_annual_rate_of_5.45_million
As for my "bona fides," I'm a CFP and have been doing this for 10 years. I get my info from professionals, not gold bugs and doom-and-gloom blogs written by the same dman people who have forecasted perpetual bear markets for the last 50 years. I'll be more than happy to compare my portfolio's performance to the change in value of your safe full of gold bullion, miserable-paying money markets, or cash in your mattress one year from now.
Well of course, we all know that every single conservative out there joined FR ten years ago. Only the newbies who agree with me on every last bit of party dogma can possibly not be "trolls."
Pathetic.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.