1st-Quarter Growth Slashed, Inflation Up

[JCMach1]

The U.S. economy grew much more slowly than previously thought in the first quarter while inflation was higher, a government report showed on Friday.

The surprise downward revision to gross domestic product -- which measures total output within the nation's borders -- cut growth to a 3.9 percent annual rate in the first three months of 2004 from the 4.4 percent reported a month ago and below the 4.1 percent pace in the final quarter of last year.

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The government also ratcheted up a key gauge of inflation, confirming an acceleration in price rises that has fueled expectations the Federal Reserve will begin raising interest rates from 1958 lows next week to head off inflation...
http://biz.yahoo.com/rb/040625/economy_1.html

SO MUCH FOR THE BUSH RECOVERY!!!

[JCMach1]

1. THE scary part is here

The core price index for consumer spending -- a favorite of Fed Chairman Alan Greenspan that cuts out volatile food and energy prices -- gained at an annual rate of 2.0 percent in the quarter, a bump up from the 1.7 percent reported a month ago...

That would have inflation clipping along at 7-10% for the year.

:(

[Frodo]

4. How do you figure that?

They said it was an annualized rate.

Where does 7-10% come from?

[dusty64]

2. Oh isn't THIS

interesting. Their book cooking is catching up fast.

[JCMach1]

3. No shite, now the FED will have to act agressively

which could bring us into the next recession by November...

[gratuitous]

5. Another "surprise" downward revision

I get the feeling that some economists are "surprised" every time the light comes on when they open the refrigerator.

[sal]

23. and they love the pretty pretty light, too!

works evertime

[Bandit]

6. Has there been a single government report that hasn't been revised

later during this Administration? Every single report that I recall has been very optimistic and then a few months later in small print the downward revision is announced. It has become SOP. From now on (actually from the beginning) every thing is suspect from this Cabal. Did you all know They LIE

[Frodo]

8. Plenty.

First off - every report is SUPPOSED to be "revised". And some of them change substantially on a frequent basis. This is because the preliminary number is based to some extent on data that has not been released at the time of the report - so they have to guess at what it is..

And yes, the numbers get revised in both directions. This is the first quarter GDP number. Each quarter gets reported three times as more numbers come in. First the "advance" the months after the quarter ends, then the "preliminary" a month later, then the "final" on the third month... before it starts up again for the next quarter with a new "advance". And of course, "final" doesn't really mean "final" as they can be revised even a couple years later

This past quarter went from an advance of 4.2% UP tp 4.4% before dropping back down to 3.9%.



The previous quarter (Q4 '03) was revised from 4.0% to 4.1% for the final. Q3 2003 was revised upward from 7.2% to 8.2% between advance and preliminary. Q2 2003 was revised upward from 3.1% to 3.3% for the final after it had been revised upward from 2.4% to 3.1% from the advance.

In fact, the last downward revision was a year ago. So it would not be correct to say that they start off optimistic and revise downward in the small print later.

[gratuitous]

10. Yes, but . . .

Of course the numbers change from the preliminary report to the final report. What gets reported, though, is how "surprised" leading economists are whenever those revisions reflect badly on this corrupt administration's horrible economic policies. As if they truly expected this re-warmed slop of supply side Reaganomics was suddenly going to produce a soufflé worthy of the Cordon Bleu.

[NewYorkerfromMass]

11. 5 year S&P 500 says:

BUSH IS FUCKED!

[Frodo]

19. See, but the spin works both ways.

When a number gets revised upward you'll see plenty of posts here about how they cooked the numbers to get TWO positive reports out of ONE number. You know.... 3rd Quarter's 8.2% growth was impressive (big time), but by reporting it as 7.2% (still outstanding) they got credit for the big jump.... THEN the next month it get's REreported as going up farther to 8.2%.

When a number get's revised downwards they're doing it on purpose to hide the true performance (or even better, they're doing it to make NEXT month's number look better - they already know that next month will come in at 4% (for example), so they knock this wuarter down a tad so next quarter looks like a bump upwards.


Either way it's taken as evidence that they are lying. Well, they probably ARE lying about plenty of things... but these numbers are not evidence of that.

[gratuitous]

22. When did that happen?

I'm not disputing you, if you'd care to put your paranoia on hold for just a moment. Could you cite a time when the preliminary numbers got revised upward? And did the reporting accompanying tht upward revision include "shocked" economists (which is what I was bemoaning -- economists always seem to be "shocked" during the Bush administration when the preliminary numbers overstate the case), or that they're talking about what a great guy Stupidhead is?

We've just seen several instances lately, and this is another one, when the preliminary numbers are brought out with great fanfare, but the revised, actual numbers are snuck out (on a Friday no less -- what are the odds?), and that economists are "shocked" by the drop in the rosy scenario.

[Frodo]

24. Sure. How about the employment numbers?

The last couple months have not only seen improved job creation numbers, but included large revisions UPWARDS of the previous two month's number. And yes, economists were reported as "shocked" (and no, there probably aren't any "shocked" economists in either case... I doubt the reporter spoke to any - just made the assumption based on the numbers that economists had predicted - in fact, just judging from the markets' reactions... nobody was particulary "shocked" today).

BTW - you can tell well in advance what day most numbers will be reported on... the Friday release is not relevant (and would actually have to be after the close on Friday to make your point - a Friday morning bad report can devestate a market... Friday's are often BIG days).


And I wasn't trying to be paranoid. I was trying to point out paranoia (or tin-foil-hatness) in the reading of the numbers.

[leesa]

14. Right. Aren't you lost Frodo?

[Frodo]

18. What does that say about you?

Let's see. Someone posts an (inaccurate) assumption. I point out that it is innaccurate and give evidence to back it up.

That the facts are inconvenient to the argument is not evidence that the person quoting the facts is biased.

What in the post was wrong? I take it you would prefer the alternative view be correct? Well, it would be more usefull, but it's only wishful thinking. We need to concentrate on facts that make our case (and there are plenty - the deficit is a big one) rather than fantasize about the ones that don't exist.

[ashling]

20. Like the "revised" costs of the medicare bill

[Frodo]

21. I'm not sure of the reference.

But it's probably correct. Just about every "estimated cost" for a budget program comes in low.

I never met a Navy ship that was built for what was originally budgeted.

The only ones that come in under cost are the ones they lied about to begin with and don't fund fully (no child left behind anyone?)

[leftofthedial]

7. I wonder when they'll start telling the truth

about unemployment

and start telling the truth in the first place, instead of serving the bushgang's political needs?

[cmutt]

9. I wouldn't hold my breath

..waiting for them to tell the truth. I'm not sure they know which end is up, let alone what is the truth anymore. This admnistration is bent on destroying this country -- all for the sake of power and money. What HAS the Bush administration changed for the better?
Economy?
Job outlook?
National Security?
Environment?
Education?

I fail to see ANYTHING positive accomplished in the last 3 1/2 years! How can Bush have anything above a 25% approval rating is just beyond me!

[Geo55]

12. cuts out volatile food and energy prices

Ignore that elephant on the couch....

[progressivebydesign]

17. Food prices have skyrocketed!

Because we can't import cheap food from other countries, that is the ONE area that cannot be manipulated by importing inferior products. Food is the one area that HAS to reflect the condition of our economy. The prices are unbelievably high right now... We are reliving the 70's.

[leesa]

13. What a surprise. Now where are all those apologists who have

tried to put people down on this board for denying that the economy is in recovery???

[arlib]

15. There is one....

....on this thread right now. They even took time out to defend Zell Miller on another thread. Verrrry predictable.:eyes:

[tom_paine]

16. Even as they prepare the LIES for this quarter's growth

And I'd wager that even the revised figure is false and worthless.