Economy's Growth Is Better Than Expected

[wicket]

Economy's Growth Is Better Than Expected

The economy logged a solid 3.8 percent growth rate in the first quarter of 2005, a performance that was better than previously thought and a fresh sign the expansion is on firm footing.

The new reading on gross domestic product, released by the Commerce Department on Wednesday, marked an improvement from the 3.5 percent annual rate estimated for the quarter just a month ago and matched the showing registered in the final quarter of 2004. GDP, the broadest gauge of the economy's health, measures the value of all goods and services produced within the United States.

Stronger spending on housing projects, more investment by business in equipment and software, and a trade deficit that was less of a drag on economic growth all played a role in the higher first quarter GDP estimate.

The first-quarter's showing was slightly better than the 3.7 percent growth rate that economists were forecasting before the report was released.

[truthisfreedom]

1. nobody believes in government numbers. why? because nobody is governing.

bushco is politicking. they have no government... they have a worn-out mini-mafia.

[saigon68]

22. They are closing factories right and left

And importing "Guest Workers" to wash dishes and clean toilets.

[nikraye]

2. If they'll doctor scientific reports (global warming)...

then they're capable of generating other false reports, as in this case. It's all part of the Bush-Rove propaganda machine. Can't be trusted.

[bling bling]

35. I was just going to post the same thing.

Why the hell are we going to trust government data when they were CAUGHT altering data on the environment.

[Gyre]

3. Believe me, w/o spending on "the war"

We'd be in a deep recession. It's coming.

Gyre

[donsu]

4. I don't believe it - the only economy that is doing well is the

military/industrial, at the expense of everything else.

how can the economy be doing well if america is borrowing money every day?

[ZR2]

5. Can only speak for my little neck of the woods

But my company has more work than it can handle. Over the last 3 weeks we have hired on an additional 8 employees, which isn't too bad for a 50 employee company.

[Lindacooks]

26. Well, good for you. But

in my neck of the woods, the 'Help Wanted' ads total only two small newspaper columns.

[Yavin4]

6. First Quarter of 2005 Reflects Election Year Spending from 2004

Keep in mind these factors about Q1 GDP growth:

(1) Interest rates were still at historical lows for Q1 2005. They're not now. They're heading back to normal levels.

(2) Last year, 2004, was an election year, and there was a lot of election year spending on projects, big and small. Every senator, congressman, governor, etc. doled out the cash in order to get elected. That money showed up in Q1 2005 and will probably be around for most of the year until the last quarter of this year.

Since the mid-term elections of 2002, I have predicted an economic collapse in 2006, and nothing has convinced me otherwise. In fact, I didn't even consider soaring fuel prices in my prediction. You have to follow interest rate policy. Our economy is dependent on cheap debt and cheap gas, both of which will get more expensive next year.

[sabra]

7. Economy's Growth Is Better Than Expected

<<SNIP>>
http://www.forbes.com/work/feeds/ap/2005/06/29/ap2116930.html

Economy's Growth Is Better Than Expected
06.29.2005, 10:51 AM

The economy logged a solid 3.8 percent growth rate in the first quarter of 2005, a performance that was better than previously thought and a fresh sign the expansion is on firm footing.

The new reading on gross domestic product, released by the Commerce Department on Wednesday, marked an improvement from the 3.5 percent annual rate estimated for the quarter just a month ago and matched the showing registered in the final quarter of 2004.

GDP, the broadest gauge of the economy's health, measures the value of all goods and services produced within the United States.

Stronger spending on housing projects, more investment by business in equipment and software, and a trade deficit that was less of a drag on economic growth all played a role in the higher first quarter GDP estimate.

<</SNIP>>

[Deja Q]

8. Bull shit. I've seen far more FOR SALE signs on homes and heard more

on jobs being terminated and offshored.

Wake me in 2006, or if the people revolt. Regarding the latter: :rofl: Not even in my dreams do I see that happening.

[Tux]

9. Shit

My town has 1 job per 15 people and more homes are being forclosed than anything.

[ckramer]

10. Do you (the joe6packs) feel the economy is better?

I don't feel it.

[sendero]

11. More cooked numbers...

.... wait a couple months and they'll be quietly revised downward.

[unlawflcombatnt]

37. Downward Revision

They'll definitely revise those numbers downward. They've done that for the last 3 months with new home sales. March started at a 1.43 million annual rate. Then March was revised downward in April to 1.313 million/year. That way they could claim that April's number of 1.316 million represented an *increase* over the previous month. Then May's number was reported as an *increase* to 1.298 million/year. An increase? Yes, indeed. They downwardly revised April's 1.316 million to 1.271 million/year. Talk about a "revisionist" history. The Bush administration has the same "creative" flair with numbers that is has with facts. If the numbers don't fit, they just create new ones.

[xultar]

12. Well they send out purposly effed up low ass projections so when

it doesn't fall as far then shit looks great!

[djack23]

13. GDP is being financed by Debt

Not to be too much of a downer, but a recession is almost inevitable in the next 3 years. Likely within the next year.

Why?

1) Housing Bubble will burst
2) Record levels of Consumer Debt
3) Rising Energy Prices
4) Federal Debt / Deficit
5) Massive Trade Deficit ( expected $750 billion for 2005)
6) Offshoring
7) Rising Interest Rates
8) Continued War

[AmandaRuth]

14. what ever

In my area, its more about low paying jobs than no jobs.

Nothing like being laid off a job that paid $18-$27 per hour (Boeing) and taking a job that pays $13 (usually less) per hour.

[HockeyMom]

24. Home Depot

$8/hour and PART TIME.

[patcox2]

15. Its all inflation, there is no growth.

The GDP is adjusted for inflation. The GDP numbers are way off because for years the government has been fucking with the inflation numbers in a big way, using hedonic adjustments, the rental value to measure housing costs, and the makeup of the market baskets. I would guess inflation is more than double the published rate.

And if the true inflation number were used to adjust the GDP, I am sure we would actually be in a recession, with a contracting economy.

[silver10]

16. How much U.S. debt does China own?

How ironic. The People's Republic of China, a communist country, is keeping us going, and will end up owning America!!!

Once it and other countries get tired of buying up our bonds, our country will really be up shits creek - and there will be a recession and maybe a depression. Because eventually, maybe in one year, maybe ten or twenty, the American people will run out of money and no longer keep buying their cheap imports.

[Patty Diana]

17. Only if you're already a fuckin' million or billionaire__what a disgrace

[silver10]

18. Exactly, but its perfect because that's who they only care about

And all the other right wing nuts think that they will eventually be there too, especially if they work hard.

[idlisambar]

19. Some perspective on the numbers

How the government manufactures low inflation

Some government data suggest computer and car prices, among many other things, are falling. But when was the last time you paid less for a car? Here’s why you should be concerned.

By Bill Fleckenstein

Please join me this week in a trip to the government department responsible for fun with numbers. Those D.C. statisticians may churn out their work with a straight face, but that doesn't mean we have to fall for it. Among the skeptics are Steve Milunovich of Merrill Lynch, Jim Grant of Grant's Interest Rate Observer, and, of course, yours truly.

In a recent report, Milunovich noted that the Bureau of Economic Analysis (BEA), whose job it is to compute the Gross Domestic Product each quarter, has "stopped reporting the real computer hardware shipment figure used to calculate real GDP growth, though it is still used in GDP calculations." The BEA, which is part of the Commerce Department, made this readjustment because it is "concerned the rapid price declines for computers made the figures misleading."

http://moneycentral.msn.com/content/P72746.asp

more here for those interested...

http://seattlepi.nwsource.com/business/207970_cpi17xx.html
http://www.gillespieresearch.com/cgi-bin/bgn/article/id=343
http://www.gillespieresearch.com/cgi-bin/bgn/article/id=344

There is no question that the GDP reported is equivalent to a much lower number than say 20-25 years ago or even 10 years ago. There is considerable uncertainty over the size of the increase -- estimates vary from .5 points (BEA analysts) to over 2 points (certain outside observers).

[Cornjob]

20. We're sinking fast!

Check out the Purchasing Managers' Index, Consumer Confidence Index, etc.

Demand for manufactured goods is tanking. Auto sales are tanking.
Fuel costs are soaring. Prices for commodities are going down fast.

We are about to take a major economic plunge in all but the military-industrial sector.

The economic modelers in the US Government are too scared to report their real findings, insisting instead that 'revised' figures are more correct.

It's all a bunch of misleading B.S.

[LiberallyInclined]

21. take out the numbers from the magnetic sticker industry-

and real growth would probably be half that...

[Media_Lies_Daily]

23. Total unadulterated nonsense.

[struggle4progress]

25. We thought it would be really really sucky -- but it's only sucky!

Yippie yi yoo! :D

[ProfessorGAC]

27. Um! Is Anybody Really Looking Past The 1st Layer Of Numbers

The gov't deficit is rising, all on borrowed money, by over $50 billion per year. That's already 0.45% of GDP. So, there's an eighth of the growth.

In addition, the price of gasoline has risen in this quarter by 9%. Since the total expenditures on gasoline as a direct cost to the consumer (to run their own vehicles) exceeds $400 billion/year, a 9% increase means another $36 billion is totally driven by higher gasoline prices. Now, we're up to over 0.77%.

Then, with housing cost inflation coming in at almost 8%, the drive of the economic boost is based upon the people spending MORE money for the same level of living. Use their own numbers and the total of these extrinsic influence come in at 0.91%.

So, the nominal growth rate is only about 2.9%

NOW: Include the annualized population growth rate (people have to eat, have shelter and clothes, no matter their income level) of 1.3%, and you cut into and growth falls to 1.6%

Now, adjust for monetary inflation (about 1.3% annualized) and we get 0.3%!

This is good news?!?!?!?
The Professor

[MissB]

28. Well, they certainly gussied up the 0.3%, eh?

No, it is not good news. :scared:

[ProfessorGAC]

29. The Point Of My Post

Many know here that i'm in the radical group of economists and econometric theorists who have disagreed for YEARS (actually 22) that the current metrics are USELESS! They do not, in any way, reflect the strength, viability, sustainability or potential of the economy, either in the short or long term.

It's preposterous that there are people with Ph.D.'s that know so little about what really happens in the economy. Preposterous and pathetic.

I've had 15 papers published in this field, and in every peer review my conclusions have been found faultless. Yet, we still see the econoharlots quoted and trumpeted. Sickening.
The Professor

[Ugnmoose]

30. Professor - What is your take on the stock and bond market?

I contend that the markets are being artifically propped, especially the bond market.

[ProfessorGAC]

36. The Markets Are Not Economics

I don't examine those with the same rigor. The markets operate on microeconomic principles, and i'm a macro guy. In addition, the markets are highly rooted in speculation and hedging. Therefore, there is no short term linkage detectable between economic conditions and market performance.

I'm not sure, however, that the markets can really be propped up over the long haul. Despite the speculation that makes the market far less predictable, day to day or week to week, the ultimate goal for a company is still to show cash flow that supports profitability. At some point, no amount of manipulation will hold the value of a stock up forever, if the company performance is inadequate. (Remember the tech bubble? A few years of borrowing money to meet payrolls, but finally values plunging?)

I'm just guessing on this myself. Like i said i don't have any strong mathematical proofs around markets. Only the full macroeconomic performance has been modeled in that way.
The Professor

[VegasWolf]

32. Yes, and Japan has proved that a service based economy fails,

a country needs a strong manufacturing base. An economy of
I wash your shirt and you wash my pants is doomed. But our
brilliant administration is outsourcing every manufacturing
job that it can get it hands on. Outsourcing, the crippling
deficit, much stronger foreign growth. We're fucked. My
idea of holding long term holding in the stock market is about 15 minutes. I don't even like to leave my money overnight in the market!

[K-W]

31. Wow, the rich people sure are doing well.

I feel so proud to be an american.

[Strelnikov_]

33. And Rumor Has It That The Chocolate Ration Will Be Increased

along with an extra bottle of Victory Gin each month.

Our Leader is truly benevolent, praise be his name.

[Nigel_Tufnel]

34. has anyone in the NYC area seen Bloomberg's campaign ads....

it says he has created 62,000 jobs! WOW! doesn't mention how many jobs have been lost in the meantime...

[area51]

38. If the economy's so good,

why can't millions of people find jobs? </rhetorical>

[depakid]

39. The Grossy Distorted Picture

Here's a nice quick explanation of why GDP is such a misleading measure:

http://www.tompaine.com/feature2.cfm/ID/9316

[Skittles]

40. LYING BASTARDS

GAWD IT IS ALL SUCH F***ING BULLSHIT THEY FEED US LIKE WE CANNOT LOOK AROUND AND SEE FOR OURSELVES

[unlawflcombatnt]

41. Aggregate Wages Declined 0.34% since January

Aggregate, or total American wages & salaries have increased nominally by 1.5% since January. However, the Bureau of Labor statistics shows a 1.94% consumer price index increase since the end of January. This means that inflation-adjusted aggregate American wage income has decreased 0.34% since January of 2005. Thus, consumer spending power has declined 0.34%. Given that consumer spending accounts for 2/3 of all economic activity, this is not a good sign. This implies our economy is SHRINKING, not growing.

Someone needs to purchase our production. Less income means less purchase of production. If purchase of production decreases, so will actual production. So will jobs required to create that production. Bush is simply an economic terrorist.

[Zodiak]

43. Preach on!!

Preach-on, brother-man!!!

Seriously, we need to pick apart these statistics when they come out every month and send them to our Congresscritters as well as include them in all of our letters to the editor, etc. I have always suspected that they are using Arthur Anderson techniques to paint a rosy picture, and we need to catch them red-handed and expose them for being liars on the domestic front, as well.

They have no credibility, so let's push that into the dirt and hit them on all fronts. They are hurting, scared, and totally vulnerable....only lashing out because they hate us and they are cornered.

[leftofthedial]

42. how can unemployment (and underemployment)

be epidemic and the economy is doing well?

for the first time in my life, these numbers do not resonate with my personal experience day in and day out.

[rman]

44. Officially unemployment is not epedimic

and underemployment is non-exsistant; single parents with 3 part-time jobs is just "typically American" according to Bush.

[rman]

45. source: Associated Press

'nough said.

[leesa]

46. Ah yes...the corporattions are doing fine with all their cheap offshore

labor. No one has jobs here, however, so who will buy their crap?