So-called economic boom

[fabius]

WASHINGTON - Accelerating from a jog to a sprint, the economy surged from July through September at the fastest pace in nearly two decades. Both consumers and businesses helped power the gains, fresh evidence the national rebound is on firmer footing.

The broadest measure of the economy's performance, gross domestic product, grew at a breakneck 7.2 percent annual rate during those three months, more than double the 3.3 percent rate in the previous quarter, the Commerce Department reported Thursday.

http://www.start.earthlink.net/newsarticle?cat=0&aid=1030100636_breakingnews_story

Ok, folks, one quarter does not a boom make. If you look at the chart in this article, the quarterly growth rates are given as ANNUALIZED RATES, but this is deceptive because it's not ACTUAL growth. In fact it's EXTRAPOLATED. Now, extrapolation of any trend or statistic into the future is the most inaccurate and unreliable methods of analysis you can do.

So what was the ACTUAL GDP growth for the quarter? 1.75 percent. Ok, that's respectable for a quarter but to be meaningful it needs to continue for three more quarters. So, this is either a potential recovery, or it's just a blip.

Remember, if you don't have a job, you can't eat positive statistics.

[fabius]

1. kick for statistical integrity n/t

[opihimoimoi]

2. Bush is touting, Dems doubting, many pouting.

Apparently everyone knows this surge is the result of pent up spending since 9/11. Except Shrub who is looking for anything thing close to a sign his "plan" is working. The man is desperate.

[JNelson6563]

3. Brothers and sisters, I am hear to tell ya

that the notion of our economy recovering is just that, a notion.

7.2 GDP? Mmm hmm. Just wait till the "revisions" start. Just like the unemployment #'s. It's like a miracle every week nowadays. A fake one.

Example: A couple of weeks ago the UE #s come in at 395,000, ok? Lots of rejoicing at the Buy window, hooray!! We're under the magic 400,000 #!!!! Until next week when they report that the #'s are 396,000--A DROP OF 4000!! Whaaaaa? Oh, did we forget to mention we "revised" last week's #s? It was really 400,000. Every week. Without fail.

Oh and take a look at that GDP, a good look. How much of it is military spending? Let us look at consumer debt, no I mean really LOOK at it. Is it high? You bet! Is it high in an unprecedented way? Yes.

Record bankruptsies. Record foreclosures. Wall Street scandals in abundance. Record breaking deficits. Out of control war in Iraq. Banner-gate, Wilson-gate, more and more questionable inof re: Iraq contracts....

The list goes on and on. Coming up with a blow-their-minds number like 7.2 is so painfully obvious yesterday's market lemmings weren't even jumping for it. That is really something.

Al Gore gave an excellent speech not too long ago, about "false impressions". There is a very good reason he went to lengths to point out that at least Clinton/Gore submitted honest numbers.

Instead of imitating so many of our Congress Dems and wringing our hands at such cleverly devised distractions, we need to stay focused on the ugly facts, keep our heads out of our asses and our eyes on the target.

Julie

[dbt]

4. Good points, Julie!

This "best growth rate in almost 20 years" bidness really irks me. With the economy truly roaring under Clinton, I find it hugely suspicious that one quarter of bu$h-o-nomics turns in such a stellar performance than one has to go back to (wait for it) 1984 to beat it.

This whole thing smells like Distraction to me: "Never mind Iraq or California, watch me pull a rabbit out of this hat." And, of course, when the REAL numbers come out, they'll be buried on page B19.

:freak:
dbt

[JNelson6563]

5. correction

I don't think it was a hat they pulled this out of....haha

I sit and wait for the real #s to come out, when they think no one's lookin'. ;-)

Glad you see it too, come join the rest of us cynics in the Stock thread later! :hi:

Julie

[screembloodymurder]

6. They're cooking the numbers on the economy to justify tax cuts

just like they lied about WMD to justify war.

[leftchick]

9. you are right, and don't forget....

The new and improved tax cut plan chimpass will be rolling out for his reselection campaign!

[wyethwire]

16. The flip side

If the economy is now doing great, what does Bush need with a tax cut?

[Fla_Democrat]

7. So, it's like a 'projected' surplus?

[Noordam]

8. What has this man been drinking

"Consumers were buying everything from cars and clothes to homes, and businesses are seemingly coming out of their cocoon," said Mark Zandi, chief economist at Economy.com. "

Car sells are FLAT... or have I missed something......

[TreasonousBastard]

10. Yet another thread on this...

but this time complaining about annualized rates.

Nothing wrong with annualized rates if done honestly, and this was just a preliminary report, with the real numbers coming out at the end of November.

I suspect they were including a factor for the usual jump in Christmas spending coming up, and that's how they annualized it, but it would mean reading the whole thing to see if they did. It would also be bullshit, since the last quarter was an anomaly.

There was close to a hundred billion in additional consumer spending due to the tax cuts, and that made for a huge blip that we probably won't see again. There was also a huge export jump that was probably the export of building materials and the like to Iraq. Some additional military spending was also included in the figures. Housing sales and starts were up, due to low interest rates.

Inventories were pulled down drastically, so a lot of the stuff that was sold was already produced. That's how we could show a large GDP increase without an employment increase. I'm not sure exactly how they now account for imported goods in the inventory figures, but I suspect that once imports get into the supply stream here, they go into the GDP. Increased sales does not mean increased employment, at any rate.

Some economists think that replacing those inventories means higher employment. For some things, like plastics, chemicals, and plywood, that's probably true. For others. like electronic equipment, it just means more imports.

On the bottom line, if people aren't working at decent jobs, the GDP figures are meaningless and can't be sustained. Getting people to work, raising the median income, and reducing the wealth and income disparities are what's needed. We have excess and underused capital and production facilities here-- what we need are consumers.

[JNelson6563]

11. Personal spending down .3% Sept.

After teh tax-bribe ckecks were gone kinda fell flat, eh? Interesting.

Julie

[TreasonousBastard]

12. Wait till...

the fourth quarter numbers come out next year. It's what, 70%, of retail profits are Christmas purchases.

We'll know soon enough if retailers are throwing parties or funerals. We'll also know if consumers are loading up their credit cards or taking out new mortgages to pay for whatever it is they buy.

Car sales and housing starts are primary movers in the economy, but they can't sustain it forever and depend on debt. Health care is another prime mover, and that depends on how many people are insured-- privately and publicly.

[Maeve]

15. Watch the parking lots this buying season

Compare the lots at Wal-Mart/discount stores vs the mall. The past two years, you could see the difference and know folks were spending very carefully.

[NoMoreRedInk]

14. The GDP #'s reported yesterday do not include XMAS. Regardless, the #'s..

are seasonally adjusted.

[NoMoreRedInk]

13. Annualized percentages is how GDP has been reported for decades****

nm

[wyethwire]

17. MORE ENRON ACCOUNTING**

[HFishbine]

18. Maybe so

But there's another point to consider. What if a true economic expansion really does take hold? What if by Janurary the economy is adding 200,000 jobs a month? Are the dems going to continue to try to pick apart the statistics? Are we going to try to assert that that's not good enough?

Whether accurate or not, this quarter's numbers are a warning. The dems better be prepared for the idea that the economy may be in good shape come next November and we better have plenty of other reasons -- reasons that resonnate with voters, why the dems are the better alternative.