Does anyone believe the 3rd qtr 7.2% annual growth after the Bush revision

[papau]

History?

http://www.bea.gov/bea/newsrel/gdp303a.xls

For those who do not follow the GNP revisions of the Bush "truth tellers", those 2.2% positive and 0.9% positive results for first quarter 2001 and second quarter 2001 (that's from memory as the DOC does not seem to have the old numbers on its site)are now (-)0.6%, then (-)1.6%, and then the only negative qtr in the old series - the 3rd qtr - is now said to have been (-)0.3.

It appears that numbers have been pushed around a bit so as to show a stalled GNP as Bush takes office, followed by overstatements of growth that are meant to create confidence that will build future growth - and when that does not happen, we get decreases the quarter following the big growth quarter.

The Number series (all seasonally adjusted - but with the adjustments for the seasons no longer the same from year to year!! - and I can not get the raw numbers at the moment - I wonder why) for 4 qtr 99 to 3rd qtr 03 are

7.1, 2.6, 4.8, 0.6, 1.1, -0.6, -1.6, -0.3, 2.7, 5.0, 1.3, 4.0, 1.4, 1.4, 3.3, and today's 3qtr 03 of 7.2%

The pattern is come into office and say there is no growth - yea verily, there is recession (and there was a downturn due to the Bush tax cuts for the rich and those projected deficits keeping long term rates higher they would otherwise have been given the Fed easy money policy and the economic slowdown itself pulling long term rates down in absolute terms) - all by pushing growth in numbers to the end of the year so as to get a 2.7% 4th qtr 01 and a 5.0% first qtr 02, then a crash to 1.3% as the fake numbers must be pulled back to reality plus something saved for the next quarter, followed by the good 4.0%, and then a crash and save for 2 qtrs by showing a fall to 1.4 and again a 1.4, then growth of 3.3 from military spending - with I assume a bit held back so as to give us the 7.2% growth but with continuing job losses for both 2nd and 3rd qtr.

Why does anyone believe this crap from Bush?

Well, back to reality - they are saying that 04 will be North of 4% GNP growth for the year (meaning a couple of million job gains - all based on the last 58,000 job gain month - a number that will of course zoom - well - not zoom to the Clinton 3 million new jobs per year average - but maybe 2 million so the current unemployment rate might drop a couple of tenths so that the Wall Street Journal can blast that the "trend" is wonderful). But in my world I am sticking to 04 between 3.25 and 3.5 --- and I expect I will be correct - but only after the revisions are made - assuming Bush and crew are still doing the stats.

Meanwhile the Labor Depart is not being as creative with the numbers - and it looks like rather than the 50% all jobs lost being jobs lost to permanent restructure - a problem we always need to address every year - the Bush job losses are above 80% permantent loss to restructure - meaning Bush tax breaks and broken regulations are moving US jobs overseas.

Christ - Bush could not plan and execute a 2 car funeral. And our media says nothing!

[zoidberg]

1. Actually, second quarter GDP was revised up...

From 2.4% to 3.3%.

I'm also not quite sure how tax cuts cause jobs to go overseas.

[papau]

4. Where do you find a history of past GNP numbers for a quarter by revision

date? These days my memory sucks on too many occassion where it never did in the past - for numbers and for my kids names - senior moments become more frequent the more senior I get.

In any case - the IRS code section is 482

and jobs go overseas based on how - or how not - that section is enforced.

Plus a promise to bring back untaxed overseas profits without taxation - or with very little taxation - which was promised in 2001 and is now going through as a law in the FSC REVISION (FSC is out and lower normal tax rates are in plus a tax holiday at some level to bring back to the US those overseas profits so that we have "taxed cash" to use to pay our friends - the rich who own most of the stock assets in this country - check the percentage owned by value by income class -pay these rich folk a bit more -with newly lower taxes via Bush - on dividends.

This is not atomic science - but one wonders why the financial media is not able or willing to state the obvious (except for Krugman).

[zoidberg]

15. Past press releases at bea.gov

If you dig around enough you kind find previous press releases. A google search might be easier.

[mhr]

6. Tax Cuts Make The Rich Richer At The Expense of Everyone Else

Much of Bush's tax cuts have gone to individuals that receive substantial income from dividends. These people do little to help the economy as all they have to do everyday is collect a check.

What is really clobbering the US economy is low interest rates. Low interest make it very easy for big business to invest in other parts of the world instead of the US. In other words, business borrows the money here and then invests it someplace like China creating jobs in that country.

The business looks profitable because their bottom line improves but this does virtually nothing to improve the fundamental economy here in the US. It will cause the dividend checks to increase which helps those few people that live on that income(those already wealthy).

For the bulk of us, we are toast.

[boxster]

11. Not to mention that the whole trickle-down economics BS assumes

that companies with record profits will share those profits with their employees and provide more to charity, blah, blah.

Someone forgot to factor human nature into trickle-down economics, especially in our "me first" culture.

[stevebreeze]

19. Tax cuts put pressure on value of the dollar

It tends to make people think the value of investing in dollars will decrease due to inflation. A lower value for the dollar relative to other currencies makes imports cheaper.

[Skittles]

2. I believe NOTHING this piece of crap misadministration

comes up with. NOTHING.

[cknoch]

7. uh....

...the "administration" doesn't come up with these numbers....Greenspan and the Fed do....which is the same Fed as the one under Clinton. Granted they're under certain pressure to make the numbers look good, but there are too many independent economists out there that check these numbers.

What we need to realize is that these numbers are vastly over inflated by the tax cuts, which are merely a very short term situation. Its the equivalent of putting a band aid on an economy that is hemorrhaging from a lack of quality jobs for upper-middle to working class Americans.

Job numbers were down another 45,000 this last month. That’s 45,000 families out of a provider. The other problem beyond unemployment is "underemployment". This is the worst in the IT field where people making $80,000 a year 3 years ago are not lucky to find a job that pays $30,000. And those people don't count against unemployment.

[papau]

8. Prof Econ at Fed have "retied data" and changed seasonal adjustments

so far in the last 3 years.

The retie data was expected - but how it was done - so as to imply a bad first qtr 2001 - was bull shit

And the new seasonal adjustment that changes from year to year has no credibility with me yet - maybe in 5 years - but right now it jusy looks like Bush playing with numbers.

I do not trust fudge factors - but if they must exist I demand that they be stable. And the retie to other data should happen at a point in time - this spreading is also bull shit.

Not that I am upset with what Bush has done to the very smart nice folks at the DOC's BEA - Indeed - I am just really pissed at what Bush has done.

[mastein]

3. Numbers are a bit misleading

Agreed, and I also agree that there more than likely will be a revision, but don't know how sharp downward. Most (if not all) of the time the revisions are toward the mean. I also see this gain in a historical perspective, basically Bush is clearing out the gov't coffers (and then some) and giving his friends cash and keeping the rich fat. It will be generations paying ourselves back for this manufactured GDP/GNP increase.

What surprises me is that durable goods numbers were up, but less so last week.

[papau]

5. That also surprised me - and inventory is not being built

????

:-)

[ewagner]

9. How can that be so?

I don't understand that statistic.

[mastein]

20. Durable good sales up but inventory not

I am no economist, but I will try to explain. . . First durable goods are those products expected to last 3 years or more, think kitchen appliances or larger generally.

Inventories are measured at a stagnant point, for example the same day every month. So if a store sells the exact number of products they get in, there is no inventory gain, but there is obviously a big sales gain.

These days we have tremendous product management systems. For example most furniture stores and even big box home improvement stores (Lowes, Home Depot, Menards etc.) have regional inventory sites where they dispatch everything from. When my wife and I bought our washer and dryer at Lowes last year, we bought at the store near our home in Northern Virginia. The delivery came from a warehouse in Maryland. This lets the big retailers keep their inventory low and offer a large selection all at the same time. So the decrease or evenness of inventory means the goods are moving in a more efficient manner, and allowing the company not to tie up its money in items waiting to be sold and instead focus it in other areas of growing the business.

I hope this answers your question. If not feel free to contact me off line. (Or if any of the real econ people are willing to help pls. do.)

[boxster]

10. How could the economy NOT surge with Shrub's record gov't spending?

No wonder fiscal conservatives are turning against BushCo in droves - since when is the way to stimulate the economy spending ludicrous amounts of money and racking up extraordinary deficits?

Oh, wait, that was Reagan's plan.

Yeah, and WE'RE the "big government" party, huh?

Also announced today (or yesterday) were extensions for Halliburton contracts, so the next couple quarters should be pretty assertive, too.

Bush is going to set a record for campaign spending. With the $87 billion, he'll be at $150 billion plus. He's managed to get around the campaign finance laws by spending money in Iraq trying to buy the next election in the US.

The $200 million he's going to raise for campaign 2004 with look like peanuts.

[ShaneGR]

12. The truth of what is going on

You have struck at the heart of what is happening. Basically, Bush ramps up military spending and hands over somewhere around a $1000.00 tax break over to the American population. Of course the money that goes to those Americans doesn't necessarily get saved. Most of the time people get their check and head right to the local mall.

GDP shoots up and everything seems peachy. People are getting jobs, but most of them are clerks working in the local mall. After the holidays, the number shrinks back down again, and unemployment numbers are going to go back up. This kind of GDP cannot be sustained, and income levels will still show a slow bleeding.

[ewagner]

13. Interesting Point

Is the seasonal growth in jobs factored into this?

[boxster]

14. Meanwhile, everyone jumps on one quarter worth of data,

claiming that it's proof the economy is taking off, not realizing that it was the short-term, here's your $1,000, spending spree, combined with the increase in military spending in Iraq and spending billions on a useless money pit called the Homeland Security Department, that helped cause the momentary improvement.

There is no way Bush can keep artificially stimulating the economy. He's already asking for more tax cuts, which I hope have no chance in hell of getting approved.

I'm afraid of what the economy is going to do when we "finish" in Iraq. Without the huge influx of capital into companies like Halliburton, combined with record profits in the oil industry from artificially inflated oil prices, the economic upturn is non-existent.

[ramapo]

16. Financed by debt

I heard that the increase was fueled by consumer spending along with gov't expenditures (especially defense).

The consumer spending is puzzling. I have cut way back on spending as have most people that I know. I'm just much more cautious. Are that many people still in a spending frenzy fueled by optimism?

True, many have more cash due to savings from refinancing but many are increasing their debt for home improvement. But interest rates have risen and there's an awful lot of debt out there.

[boxster]

18. I read an article that said consumer debt has gone up significantly,

in the past couple of years. So, people are apparently spending more, but financing it. In addition, people are saving less than they were a few years ago.

In combination, those thoughts are scary because it means that not only are they spending the tax "cuts", they are spending more than that, as they're increasing debt load.

Maybe they're just using the Bush Administration as their role model!

[Zynx]

17. At most we will create about 600,000 jobs between now and the election.

Productivity growth and corporate outsourcing are too powerful to contend with to get meaningful consistent job growth.