How "strong" is the economy? Uh, not as strong as they first claimed

[Zenlitened]

(Props to DUer UpInArms, who posted this story in the "Stock Market Watch" thread in LBN. :hi:)

Growth revised lower, inflation higher

By Rex Nutting, MarketWatch
Last Update: 8:47 AM ET July 29, 2005

WASHINGTON (MarketWatch) - The U.S. economy was weaker over the past three years than previously estimated, while inflation was moderately higher, the Commerce Department said Friday.

Instead of growing at a 3.1% annual rate from in the three years from 2002 through 2004, the economy actually grew at a 2.8% pace, the government said.

(snip)

At the same time, inflation was a bit hotter than previously thought, especially in 2004. The closely followed core personal consumption expenditure price index rose at a 1.7% annual pace in the three years, rather than the 1.4% earlier estimated.

In 2004, the core PCE price index was revised from1.5% to 2%, at the top of the Federal Reserve's 1.5%-2% comfort zone for inflation.

Full story:
http://www.marketwatch.com/news/story.asp?guid=%7BE5F40DB7%2D5B66%2D4DF9%2DBE78%2DD3B447D04F5B%7D&siteid=mktw

[SammyWinstonJack]

1. More tax cuts for the rich!

:silly: That's the ticket!

[Deja Q]

3. More job cuts too, that'll make their profits look even bigger!

:woohoo:

[Deja Q]

2. Well, individual Chinese still can't afford the stuff they make for us...

and as we lose our jobs or see the trends, we sure as hell aren't going to spend a damn dime for anything except the essentials.

Come ye thy crash. What's left to say? Those in power are selling us out. What's good for the goose.

(I hate being a cynic, but when they act like civilized humans again, so shall I. Until then, they will remain greedy and there comes a point when money isn't the cure for all evil... it becomes the CAUSE.)

[mtnester]

4. Cooking books everywhere is

hard work

[ProfessorGAC]

5. And, I've Been Saying What? Right Here At DU?

For how long, now? I told you guys that the numbers are cooked, reported before their really analyzed, and that the indicators used by conventional economics are somewhere between meaningless and marginally useful. Check the archives. These numbers are almost exactly in line with the "inflation" in values i've been decrying in the econ community for over 4 years here, and over 20 years IN PRINT!
The Professor

[Zenlitened]

6. Sucks to be right sometimes, doesn't it? :(

:(

It just seems that the numbers in EVERY economic report coming out of this administration are released with great fanfare... then quietly revised downward a few weeks, months or even years later.

Bush credibility = 0.

[ProfessorGAC]

8. Bullseye!

The Professor

[annabanana]

10. so why isn't the investment community

hunting this administration? Why the heck aren't they being brought to ground?

[ProfessorGAC]

11. Speculators Still Make Money

It's just that the changes in stock prices are based more upon the cash flow into and out of the equity and capital markets, than they are on the financial performance of the firms.

So, the speculators and investors, worried about THEIR bottom lines, have few complaints. They got in after the big sell-off in 2001. The stock values still may not be where they were in 1998, but they still went up. The big investors don't care why they made money, only that they did.
The Professor

[Bonhomme Richard]

7. Smoke and Mirrors.....................

They have based all this economic news on corporate profits and employment numbers completely disregarding the fact that those employment numbers reflect taking jobs at a great reduction in pay.

I drove through a large industrial park here (western CT) the other day and was shocked to see that half the buildings were empty. I'm talking about 20 empty buildings. Now I used to call on those companies and they were all good paying jobs. Where did all those managers, engineers, technical and non-technical people go? How about the companies that used to service them. I don't have a clue since no new manufacturing operations have opened in this area lately.

This economy is complete bullshit.

[ProfessorGAC]

9. Corporate Profits Are Actually Not That Good

Margins are terrible in almost every SIC code. (Excepting retail, which are pretty constant.)

The investors and speculators have simply changed their expectations of performance and redefined what are strong financial positions. (Think P/E Ratios)

The companies are not actually doing that well. Stock prices are no longer that good a direct indicator of financial performance, cash flow, and profitability.
The Professor

[Zenlitened]

13. But but but... car sales are up!

That was the top story in the business segment, so it must mean the economy's doing great!

:sarcasm:

[ProfessorGAC]

15. Oh, Yeah. I Forgot

I wonder if the fact that EVERYONE is discounting massively right now might be the cause of that. Probably not, huh?
The Professor

[acmejack]

12. Were all the managers, engineers and technical people go?

We're right here1 Of course, we are no longer counted in the unemployment listings. We have seen our lives collapse around our ears, everything we knew to be true, suddenly is not.

College, wasted time, it now appears. No jobs left, other than occasional temp gigs. Too old to get hired in a menial job, what are we supposed to do?

CAFTA is just a kick while we are down.

[wli]

14. 1929 redux via P/E evaporating out from under the stock prices

No big surprises.

[Just Me]

16. Fraud and deceit has become a regular practice by corporacrats.

The creative accounting isn't going to end as long as the corporacrats are allowed to get away with that crap. Since the corporacrats are now controlling the country, they will continue their fraud and deceit.