US ECONOMY SHRANK AT 0.7 PERCENT RATE IN FIRST QUARTER

AP ^ | 5/29/2015 | MARTIN CRUTSINGER

[tellw]

WASHINGTON (AP) -- The U.S. economy went into reverse in the first three months of this year as a severe winter and a widening trade deficit took a harsher toll than initially estimated. The Commerce Department says the overall economy as measured by the gross domestic product contracted at an annual rate of 0.7 percent in the January-March period. The revised figure, even weaker than the government's initial estimate of a 0.2 percent growth rate, reflects a bigger trade gap and slower consumer spending. It marked the first decline since a 2.1 percent contraction in the first three months of 2014, a slump that was also blamed on winter weather. Economists expect a rebound in the current quarter to growth of around 2 percent and expect the economy to strengthen later this year.

[sunrise_sunset]

The numbers are all seasonally adjusted, unless you think the winters are that much worse than usual.

[Rodamala]

Dude, that was 3 months ago.

[RayChuang88]

While I agree, the past few winters have been really bad—parts of the Northeast this past winter got essentially two winter seasons’ worth of snowfall in the space of a month. Indeed, those old enough remember the 1979 Chicago Blizzard (January 13-14, 1979), a blizzard combined with two subsequent months of below-freezing temperatures (It didn’t get above freezing in any significant way until late March!) that just about stopped all economic activity in that city and probably contributed hugely to the national economic malaise at that time.

[alstewartfan]

IDK about you, but I was worried sick about the economy “overheating”. Thank you, Maobama!!

[tellw]

They changed the story/headline again at the link.

“FUEL AND POTENTIAL FIRES FOR THE US ECONOMY AHEAD

WASHINGTON (AP) — The US economy should get better after a sputtering first quarter, but how much better? It’s complicated.

Steady hiring and low gas prices should help power solid growth through the rest of 2015. The harsh winter and a labor dispute that slowed trade at West Coast ports are both over. Home sales and construction are rebounding, along with business investment.”

In other news: Oceania has always been at war with Eastasia.

[servantboy777]

>>Disgusting what Libs have done to us<<

>>but more disgusting that we let it happen. Fight back America!<<

Republicans are complicit. What else can we do? You’re not suggesting we march on Warshington with pitch forks are you?

[Red in Blue PA]

Green shoots!/s

[Bluestocking]

Weather is unpredictable; so if weather is now to be considered an important factor in determining GDP, how can economists’ predictions be taken seriously anymore?

And since weather is not only unpredictable but also uncontrollable, how can we take the Federal Reserve seriously anymore when it claims to be able to affect the economy by adjusting interest rates?

In fact, there are so many other important factors that are unpredictable and uncontrollable by the Federal Reserve that pronouncements by Janet Yellen should have no more relevance to reality than those of a gypsy fortune teller.

For example, the interest rates set by the European Central Bank, the Bank of Japan, etc., are critical to the health of our economy.

So when the ECB and Bank of Japan cut interest rates drastically last year, the Euro and yen sank against the U.S. dollar, thereby making European goods less expensive on the world market than our own and hurting American exports. It wasn’t just the weather that caused our first quarter drop in GDP.

So what is Janet Yellen’s response going to be to curb the rise of the dollar? In fact, she’s going to make the dollar rise even more by raising interest rates. This will cause investors to trade Euros and yens for dollars in order to by U.S. Treasuries with their higher interest rates, and on and on until American goods are priced out of the world markets, our exports collapse, and our GDP goes into a death spiral.

[Flick Lives]

The money multiplier is only .75. That means all of the bogus stuff that's being printed has no long term effect on the economy.

My understanding of some of this stuff is shaky at best, but would a multiplier under 1 mean the the multiplier effect is actually working backwards? $1 in yields .75 cents out? If so, were in a negative feedback loop. That can't be good.

[grania]

I think you're correct. A money multiplier of 3 would mean that every $10 that I spend in the local economy, as it creates more income and spending, generates $30 in the economy.

I would think a money multiplier of less than 1 means that money is sucked of by govs and other entities that don't spend it and some of it doesn't even become part of the economy.

[sitetest]

It’s all that global warming.

[b4its2late]

TOTALLY UNEXPECTED! /s

[bert]

The trade gap was not responsible for a reduction in the GDP

The strong $ was if any thing responsible for an increase in the trade gap. A more important factor was the strike by the unions preventing imports

[dp0622]

i cant think of a single person i know who makes anything that is sold to other countries.
the only people i know who make something are construction workers who build houses here.
my uncle worked in a belt making factory in Brooklyn for over fifty years after WWII.

[TomasUSMC]

Didn’t they also redo the way they calculate this number so that it appears higher?

[tanknetter]

Didn’t they also redo the way they calculate this number so that it appears higher?

Probably, the calcs for these numbers are always being revised. But I can't speak to this one specifically. Without doing some research (and I have a pint of Haagen-Das that's calling my name ... ;-) )

The two figures that were definitely revised to present a much rosier picture were Core CPI (removed energy, food and a couple other things because they're considered "too volatile") and unemployment (look at the difference between the "official" U3 figures and the U6 ones).

[TomasUSMC]

“So all in all, get ready to be fooled again! The new “GDP” will be about 3 percent higher than the old GDP.”

http://www.newsmax.com/Finance/Advani/GDP-CPI-growth-investment/2013/08/07/id/519128/

Sooooo.....when they say....US ECONOMY SHRANK AT 0.7 PERCENT RATE IN FIRST QUARTER, .....that means it shrank at 3.7 percent......NEGATIVE 3.7 GDP. FUNNY NOBODY TALKS ABOUT THIS ON FOXNEWS?

WELL there you go.