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U.S. Economy Grew Less-Than-Forecast 1.2% in Second Quarter

David_N

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Well, it looks like the fed won't be raising rates anytime soon. I know that the deficit hawks and balanced budget lunatics will continue to prevent much needed growth.

U.S. Economy Grew Less-Than-Forecast 1.2% in Second Quarter - Bloomberg

The U.S. economy expanded less than forecast in the second quarter after a weaker start to the year than previously estimated as companies slimmed down inventories and remained wary of investing amid shaky global demand.
Gross domestic product rose at a 1.2 percent annualized rate after a 0.8 percent advance the prior quarter, Commerce Department figures showed Friday in Washington. The median forecast of economists surveyed by Bloomberg called for a 2.5 percent second-quarter increase.
 

mmi

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Economy Grew Less Than Forecast — 1.2% in Second Quarter

BEA has been struggling in recent years at getting accurate advance estimates. For the past three years, they've been underestimating Q1s and overestimating Q2s. Perhaps they've overcorrected for that. I'd recommend waiting until the last week of August for a revision.

The major component holding back growth in the past quarter was a sharp decline in private inventory investment. Inventory growth has now declined for five consecutive quarters, actually becoming negative Q2.

private_inventories_2011_2016.jpg

Doesn't this mean that GDP has been diminished over the past fifteen months by decisions to slow production and thereby deplete inventories? If consumer spending and business spending for facilities and equipment can do OK over the next eighteen moths or so, shouldn't we reasonably expect production to increase to replenish inventories?

insult-free mmi post #9 (new series)
 
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DarkWizard12

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whoa, wasn't the initial report at 2.6%? They had to revise it down to less than half of that? WTF, how do they get it so wrong?
 

mmi

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You're going to have to explain that to me

It's a representation of my determination to shed my DP reputation of "angry, insulting, and nasty." When people have insulted me around here, I've insulted them back, but I know that does nothing but perhaps diminish me in the eyes of some. And I've had a tendency to mock RW … "uninformed" types even without having been insulted.

I realised in a thread posted in the basement to taunt, insult, and ridicule me that I can easily avoid this behaviour, so I'm doing it. I expect the small (very small, I'd say) collection of "mmi haters" won't be at all phased by this — they will continue to unload. But I'll feel better.

I think the turning point was pondering the contrast many see between social media and "real life." I figure they're really not separable in that way.

I found myself posting that I rarely get angry at people, just things like, oh, I dunno, my freaking severely osteoarthritic hip, which I curse regularly. I say really mean things about people all the time outside of discussion groups like this, but almost always in my head. (When do I ever go after somebody anymore? I'd say never, not for a long time. Well, I do yell at the TV sometimes — Fox News, bad ball and strike calls on Red Sox, stuff like that.) I can keep my shut when it's called for, so I'm now controlling my use of a keyboard in the same way.

>>did you lose your bet?

I can't recall the wager yer referring to.

insult-free mmi post #12 (new series)
 
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washunut

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BEA has been struggling in recent years at getting accurate advance estimates. For the past three years, they've been underestimating Q1s and overestimating Q2s. Perhaps they've overcorrected for that. I'd recommend waiting until the last week of August for a revision.

The major component holding back growth in the past quarter was a sharp decline in private inventory investment. Inventory growth has now declined for five consecutive quarters, actually becoming negative Q2.

View attachment 67205024

Doesn't this mean that GDP has been diminished over the past fifteen months by decisions to slow production and thereby deplete inventories? If consumer spending and business spending for facilities and equipment can do OK over the next eighteen moths or so,
shouldn't we reasonably expect production to increase to replenish inventories?

insult-free mmi post #9 (new series)

Agree, we should see an inventory build in Q3 going into the holiday season. We seem to be a 2% growth economy for the last few years.
 

mmi

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Agree, we should see an inventory build in Q3 going into the holiday season.

Hope so. The forecasts don't look all that inspiring though.

>>We seem to be a 2% growth economy for the last few years.

Averaged 1.76% under both Bush43 and Obummer. We seem to be in a better position now than we were in 2007.

Critics of the Negro point to the big increase in debt, but that was caused by a marked shortfall in revenues for a few years following the 2008 collapse. Since 2009, real spending has declined by I think eight percent. Congress has authorised one percent less than the Barry has requested, and through tight management under his guidance, actual outlays have been reduced by a further five percent.

insult-free mmi post #22 (new series)
 

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Hope so. The forecasts don't look all that inspiring though.

>>We seem to be a 2% growth economy for the last few years.

Averaged 1.76% under both Bush43 and Obummer. We seem to be in a better position now than we were in 2007.

Critics of the Negro point to the big increase in debt, but that was caused by a marked shortfall in revenues for a few years following the 2008 collapse. Since 2009, real spending has declined by I think eight percent. Congress has authorised one percent less than the Barry has requested, and through tight management under his guidance, actual outlays have been reduced by a further five percent.

insult-free mmi post #22 (new series)

Uhh what exactly do you define as 'real spending'?
when you have an expected budget increase and you raise the budget by less than the expected increase.. but still raise it... that's not a reduction that's just a smaller increase.
Here are your total outlays (spending) per whitehouse.gov
year revenue spending deficit
2009 2,104,989 3,517,677 -1,412,688
2010 2,162,706 3,457,079 -1,294,373
2011 2,303,466 3,603,056 -1,299,590
2012 2,449,988 3,536,951 -1,086,963
2013 2,775,103 3,454,647 -679,544
2014 3,021,487 3,506,114 -484,627
2015 3,249,886 3,688,292 -438,406
2016 3,335,502 3,951,307 -615,805 estimate


sooo revenue has steadily went up. even though by not a lot spending has continued to increase.
2014 and 15 due to the sequester, it looked like we were starting to get a handle on things but now the spending and debt is shooting back up.
There was no tight management.
 

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Ah yes, you're still around. I'm sure keynes was all for aggressive reduction of deficits in periods of slow growth..

Nope. He was not an idiot after all. We are now dealing with the hangover from the Greenspan/Clinton party, when the deficit problems were programmed into the economy for their followers. But yes, we should have done more in the last few years to normalize the budget, trade merchandise balance and debt.
 

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Nope. He was not an idiot after all. We are now dealing with the hangover from the Greenspan/Clinton party, when the deficit problems were programmed into the economy for their followers. But yes, we should have done more in the last few years to normalize the budget, trade merchandise balance and debt.

Such as????
 

joG

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Such as????

There are a lot of things one could have thought about doing to improve our efficiency as a society, fairness and its wealth as an economy.

We should certainly have been moving government out of all activities that are not economic public goods. We should have looked into replacing minimum wage, Social Security, means tested welfare etc, etc with a minimum income or negative tax regimen. When the economy was looking up, rates could have been raised to prevent the double bubble we now face and government spending should have been reduced considerably.
In foreign policy we should have been working ourselves to the bone trying to get a global security regime mandated by the UN membership that stands a chance of deflecting the nearly inevitable major war we are headed for. This alone would have, if successful enabled a major reduction of government costs. There are lots of things that we should be doing, if we want to remain the leading society, but we have concentrated more on things that are either irrelevant to leadership or even make it less likely, that we will be able to maintain our position for the next decade and increase the probability that we will fail utterly in the Great Game of survival.
 

Kushinator

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There are a lot of things one could have thought about doing to improve our efficiency as a society, fairness and its wealth as an economy.

We should certainly have been moving government out of all activities that are not economic public goods. We should have looked into replacing minimum wage, Social Security, means tested welfare etc, etc with a minimum income or negative tax regimen.

The minimum wage and S.S. have existed for over 70 years, without any negative ramifications on the economy. Replacing them for the sake of seeming busy doesn't make much sense.


When the economy was looking up, rates could have been raised to prevent the double bubble we now face and government spending should have been reduced considerably.

This would have led to another recession; likely worse than the great recession when we consider the levels of deficit spending as a percentage of aggregate output.

In foreign policy we should have been working ourselves to the bone trying to get a global security regime mandated by the UN membership that stands a chance of deflecting the nearly inevitable major war we are headed for. This alone would have, if successful enabled a major reduction of government costs.

And it would have led to a major reduction in U.S. industrial production. You can't just slash the revenues of a multi-billion dollar industry and expect the rest of the economy, which is more interconnected than ever before, to go off unharmed.

Really, you just propose cutting spending for the sake of cutting spending, with the naive opinion that it will lead to levels of growth last seen when the U.S. was industrializing and rebuilding the rest of the developed world.
 

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Well, it looks like the fed won't be raising rates anytime soon. I know that the deficit hawks and balanced budget lunatics will continue to prevent much needed growth.

U.S. Economy Grew Less-Than-Forecast 1.2% in Second Quarter - Bloomberg

I blame Trump for this. Consumer spending was up considerably while business cut back drastically. They are too afraid to do anything until they are sure Trump is going to lose. Trump is scaring business to death.

“Businesses have taken a cautious approach toward investment for several years now, so this is nothing new,” Stephen Stanley, chief economist at Amherst Pierpont Securities, said after orders for durable goods made in the US dropped by 4% in June. “But I think, if anything, the situation is likely to get worse rather than better in the near term, as many firms that have flexibility in the timing of their investment decisions are likely to sit on their hands until after the election.”

https://www.theguardian.com/business/2016/jul/29/us-economy-gdp-growth-second-quarter
 

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1) The minimum wage and S.S. have existed for over 70 years, without any negative ramifications on the economy. Replacing them for the sake of seeming busy doesn't make much sense.


2) This would have led to another recession; likely worse than the great recession when we consider the levels of deficit spending as a percentage of aggregate output.

And it would have led to a major reduction in U.S. industrial production. You can't just slash the revenues of a multi-billion dollar industry and expect the rest of the economy, which is more interconnected than ever before, to go off unharmed.

3) Really, you just propose cutting spending for the sake of cutting spending, with the naive opinion that it will lead to levels of growth last seen when the U.S. was industrializing and rebuilding the rest of the developed world.

1) On what basis do you make that daring-do statement? As far as SS is concerned, demographics are a slow teacher but thorough. And the minimum wage would accelerate the allocation of capital to foreign lands and lead thus to less employment. I see no evidence that this is not happening.
2) No it would not have, if it had been done intelligently.
3) Nope. I do not propose cutting spending. I propose doing so, where it is counterproductive so that it can be spent more efficiently. The added advantage would be a greater freedom of maneuver, when we hit the next blowout.
 

DA60

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Well, it looks like the fed won't be raising rates anytime soon. I know that the deficit hawks and balanced budget lunatics will continue to prevent much needed growth.

U.S. Economy Grew Less-Than-Forecast 1.2% in Second Quarter - Bloomberg

So anyone that wants a balanced budget is insane?

:lamo :roll:

A little advice, making nonsensical statements does not further your cause or your reputation.


Btw, I guarantee you that (barring an inflation spike - unlikely with a collapsing money velocity) the Fed will have negative rates before it gets them back to even 1%.
 

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David_N

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So anyone that wants a balanced budget is insane?

:lamo :roll:

A little advice, making nonsensical statements does not further your cause or your reputation.


Btw, I guarantee you that (barring an inflation spike - unlikely with a collapsing money velocity) the Fed will have negative rates before it gets them back to even 1%.

So anyone that wants a balanced budget is insane?
When economic growth is pitiful and spending is down, why the hell would anyone want to balance the budget and put more stress on the private sector?
 

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That's pretty laughable since businesses like his business tax plan the most.

Taxes are the least of their worries.....

Who do businesses listen too? Economists.

Many economists say Donald Trump’s proposals — from big import tariffs to mass deportations — would hurt the very demographic that supports him in the greatest numbers: less educated voters struggling in a tepid U.S. economy.
If Trump policies actually went into effect, these economists say, prices for goods lower-income Americans depend on could soar and a depleted low-end labor force could trigger a major downturn.


Read more: Donald Trump 2016 economic agenda: Economists savage Trump's economic agenda - POLITICO
Follow us: @politico on Twitter | Politico on Facebook
 

SocialD

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Taxes are the least of their worries.....

Who do businesses listen too? Economists.


Read more: Donald Trump 2016 economic agenda: Economists savage Trump's economic agenda - POLITICO
Follow us: @politico on Twitter | Politico on Facebook

No, most businesses aren't pining for the words of economists to tell them what they should think. they have a pretty good idea on their own.
However, as usual, that article titles itself as something scathing against trump but there are several positives in there as well.
 

iguanaman

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No, most businesses aren't pining for the words of economists to tell them what they should think. they have a pretty good idea on their own.
However, as usual, that article titles itself as something scathing against trump but there are several positives in there as well.

Luckily we will never find out what Trump might have done and GDP growth will pick up after the election. Trump is self-destructing as we speak.
 

Kushinator

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No, most businesses aren't pining for the words of economists to tell them what they should think. they have a pretty good idea on their own.

Half of all businesses fail by year 5, and 2/3 fail by year 10. Why? Because half/two-thirds of small business owners are likely financially illiterate. So no... they really don't have a good idea on their own.
 

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whoa, wasn't the initial report at 2.6%? They had to revise it down to less than half of that? WTF, how do they get it so wrong?

That has been the trend throughout most of the Obama admin. Growth numbers get released and then revised downwards. Projections come out and fail to get met or even come very close. There have been a couple of exceptions, but overall, this has been the case.
 
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