1st Quarter GDP revised upward to 5.6%

[conjur]

Originally posted by: Engineer
1st quarter GDP revised upward to 5.6%

Big time growth in the US economy 1st quarter. With interest rates going up and inflation creeping in, can it continue?

Will this upward revision cause Bernanke and the FED to raise rates even more vigorously?

Let's see, corporate profits are up 28% over the last year while real wages are down 0.7%. More people w/o healthcare; retirement benefits being cut; pensions going under; more people living in poverty; CEOs earning 262% more than the average person; consumers in debt over their heads (negative savings rate for the last 4 quarters, eh?); housing down; manufacturing jobs floundering; trade deficit growing; gas prices double and oil prices triple from 5 years ago....

But, hey, the economy is doing great!


:roll:


Trickle down? The only thing trickling down is the sh*t and piss from the corporations.

 

[Genx87]

Originally posted by: conjur

Originally posted by: Engineer
1st quarter GDP revised upward to 5.6%

Big time growth in the US economy 1st quarter. With interest rates going up and inflation creeping in, can it continue?

Will this upward revision cause Bernanke and the FED to raise rates even more vigorously?

Let's see, corporate profits are up 28% over the last year while real wages are down 0.7%. More people w/o healthcare; retirement benefits being cut; pensions going under; more people living in poverty; CEOs earning 262% more than the average person; consumers in debt over their heads (negative savings rate for the last 4 quarters, eh?); housing down; manufacturing jobs floundering; trade deficit growing; gas prices double and oil prices triple from 5 years ago....

But, hey, the economy is doing great!


:roll:


Trickle down? The only thing trickling down is the sh*t and piss from the corporations.

On cue

 

[GoPackGo]

Originally posted by: conjur

Originally posted by: Engineer
1st quarter GDP revised upward to 5.6%

Big time growth in the US economy 1st quarter. With interest rates going up and inflation creeping in, can it continue?

Will this upward revision cause Bernanke and the FED to raise rates even more vigorously?

Let's see, corporate profits are up 28% over the last year while real wages are down 0.7%. More people w/o healthcare; retirement benefits being cut; pensions going under; more people living in poverty; CEOs earning 26200% more than the average person; consumers in debt over their heads (negative savings rate for the last 4 quarters, eh?); housing down; manufacturing jobs floundering; trade deficit growing; gas prices double and oil prices triple from 5 years ago....

But, hey, the economy is doing great!


:roll:


Trickle down? The only thing trickling down is the sh*t and piss from the corporations.

Fixed

 

[zendari]

Originally posted by: Engineer
1st quarter GDP revised upward to 5.6%

Big time growth in the US economy 1st quarter. With interest rates going up and inflation creeping in, can it continue?

Will this upward revision cause Bernanke and the FED to raise rates even more vigorously?

What an awesome economy. :thumbsup:

 

[conjur]

Originally posted by: Genx87

Originally posted by: conjur

Originally posted by: Engineer
1st quarter GDP revised upward to 5.6%

Big time growth in the US economy 1st quarter. With interest rates going up and inflation creeping in, can it continue?

Will this upward revision cause Bernanke and the FED to raise rates even more vigorously?

Let's see, corporate profits are up 28% over the last year while real wages are down 0.7%. More people w/o healthcare; retirement benefits being cut; pensions going under; more people living in poverty; CEOs earning 262% more than the average person; consumers in debt over their heads (negative savings rate for the last 4 quarters, eh?); housing down; manufacturing jobs floundering; trade deficit growing; gas prices double and oil prices triple from 5 years ago....

But, hey, the economy is doing great!


:roll:


Trickle down? The only thing trickling down is the sh*t and piss from the corporations.

On cue

Ah, it's Mr. BS spreader.

Feel free to address one FACT I posted. Just one.

This "robust" economy is a farce. Anyone with a brain can tell that.

Although, I guess that explains why certain posters up here continue to spout the admin's talking points.


Unless you, personally, are a corporation or a large stockholder, you're being left behind.

 

[Genx87]

lmao you calling me a BS spreader?

I bet you could win the lottery and still find something negative to piss and moan about it.

 

[ntdz]

Great news. 5.6% growth is the fastest in 2.5 years...I just love watching the libbies moan and complain about how bad the economy is in the midst of these numbers.

 

[Engineer]

Originally posted by: ntdz
Great news. 5.6% growth is the fastest in 2.5 years...I just love watching the libbies moan and complain about how bad the economy is in the midst of these numbers.

Not moaning here but I'm curious as to what makes those numbers good, especially to the average person and why?

Real wages are in decline, inflation is going up. Benefits are going down or costing more out of pocket. Pensions are going away.

What about the good GDP number makes the average Joe on the street better? Profits up help the average Joe?

I think it's good to have a growing economy but the wealth is not trickling down.

 

[Genx87]

It is hard to guage really. Who owns all the stocks and profits from the increased return the companies are seeing? The owners of the companies. Who owns the company? The biggest players are the mutual funds. Who puts their money into mutual funds? Your avg joe who is saving for retirement or has a 401K plan through his employer.

Inflationary pressures will always happen when you are seeing 5.6% growth rates. The feds are working on stopping it.

Pensions were a bad plan and a relic from an earlier age. They are being replaced by 401K plans.

And recently I remember reading about how wages are starting to see a real turn upwards due from the growth in the economy and low unemployment rates.

 

[Engineer]

Originally posted by: Genx87
It is hard to guage really. Who owns all the stocks and profits from the increased return the companies are seeing? The owners of the companies. Who owns the company? The biggest players are the mutual funds. Who puts their money into mutual funds? Your avg joe who is saving for retirement or has a 401K plan through his employer.

If that is the case and companies are showing profits up over 20+ percent year over year, why a stagnant market for nearly 6 years? Strong economy and strong profits. P/E ratio's sinking below historical averages.

As for pensions, it's true that they are going away but is a 401k really better? Nebraska just canned it's 401k type retirment plan to go back to a pension because of 40 years of data suggested it would be better to have a pension.

What about lower benefits in the face of rising profits? Profits are the higest percent of GDP in history and with growing GDP's like above, why not a stronger market?

Something must be keeping the average Joe from accelerating instead of declinging? Corporate greed? Softer foundations than previously thought? Housing fueling the economy and the bubble bursting (or at least leveling off)?

What does a 5.6% GDP growth mean to you, me, my neighbors, coworkers, the guy that works at WalMart?

As for wages on the upturn, it was "expected" to happen but it is currently not. Real wages have lagged inflation for 3 years. Sure, the Fed is kicking at inflation but rising interest rates piled on top of big inflation = average Joe doesn't win, especially the ones that took out that big ole ARM to buy a house.

 

[dullard]

Originally posted by: Genx87
Who owns the company? ... Your avg joe who is saving for retirement or has a 401K plan through his employer.

That is a highly misleading statement. It isn't totally incorrect, because it is based on a bit of truth. The average Joe does own a little bit of stock. But that is just it, a LITTLE bit.

Take the lowest 90% of the population (lowest income wise). This group clearly contains ALL average Joes. If they were in the top 10%, they certainly are no longer average. How much of the stock market does this large group own? A measly 15%.

Since that 90% includes a lot more than average Joes (it also includes those poorer and richer than the average Joes), the total of all average Joes own less than 15% of the stocks.

You are correct, average Joes do own some stocks. But the average Joes own just a drop out of the total stock market bucket.

 

[ntdz]

Originally posted by: Engineer

Originally posted by: ntdz
Great news. 5.6% growth is the fastest in 2.5 years...I just love watching the libbies moan and complain about how bad the economy is in the midst of these numbers.

Not moaning here but I'm curious as to what makes those numbers good, especially to the average person and why?

Real wages are in decline, inflation is going up. Benefits are going down or costing more out of pocket. Pensions are going away.

What about the good GDP number makes the average Joe on the street better? Profits up help the average Joe?

I think it's good to have a growing economy but the wealth is not trickling down.

I wasn't referring to you, I was referring to conjur in particular. 5.6% GDP growth can never be taken as a bad thing...

 

[OrByte]

I will be happy when I see the impact on my wallet.

Until then its all hot air and I am still paying way too much in health insurance. According to my union I haven't seen a real salary wage increase in about 6 years. Interest rates are creeping up and that is going to play holy hell on a home purchase I intend to close in a couple of months. Dont even get me started on the cost of gas and such.

remind me why I am supposed to be happy over this news again?

 

[Genx87]

I'd be interested in seeing the actual breakdown of who owns what. But that doesnt mean the % of return avg joe see's changes because he owns a smaller share than the big guns.

I am a small gun but have seen decent returns even during a time when the stockmarket has been more or less stagnant.

 

[dullard]

Originally posted by: ntdz
I wasn't referring to you, I was referring to conjur in particular. 5.6% GDP growth can never be taken as a bad thing...

It can be if it is surrounded on both sides by low GDP growth*. We can't take one number and jump for joy. On the other hand, we can't take one number and scream gloom and doom. If the economy is so wonderful now at 5.6% GDP, then the economy was just horrible last quarter at 1.9% GDP. Obviously it wasn't horrible last quarter, thus, it cannot be wonderful this quarter.

You can't take one number in isolation and make a judgement from that.


*This statement is not a prediction of future GDP numbers. It is a hypothetical statement. Although, I did raise the next quarter GDP growth question earlier in this thread.

 

[dullard]

Originally posted by: Genx87
I'd be interested in seeing the actual breakdown of who owns what. But that doesnt mean the % of return avg joe see's changes because he owns a smaller share than the big guns.

I am a small gun but have seen decent returns even during a time when the stockmarket has been more or less stagnant.

I too am a small gun. I've got decent returns in the last year (everyone has). But even if I got a 50% return, 50% return on a small sum is still just a small sum. It is a pretty meaningless blip to me. Suppose my entire retirement plan doubled today, I'd be able to retire one measly month sooner on that gain I got today (assuming it didn't just drop back down tomorrow). True, hopefully that gain will grow and I'd get returns on the return.

You need to look at more than just the % return.

 

[Genx87]

If that is the case and companies are showing profits up over 20+ percent year over year, why a stagnant market for nearly 6 years? Strong economy and strong profits. P/E ratio's sinking below historical averages.

War, energy prices, instability in oil rich area's.

As for pensions, it's true that they are going away but is a 401k really better? Nebraska just canned it's 401k type retirment plan to go back to a pension because of 40 years of data suggested it would be better to have a pension.

I am assuming you are talking about the state? No surprise they would hang onto that legacy program.

What does a 5.6% GDP growth mean to you, me, my neighbors, coworkers, the guy that works at WalMart?

What has it ever meant?

It is a sign the economy is moving along at a good pace.

As for wages on the upturn, it was "expected" to happen but it is currently not. Real wages have lagged inflation for 3 years. Sure, the Fed is kicking at inflation but rising interest rates piled on top of big inflation = average Joe doesn't win, especially the ones that took out that big ole ARM to buy a house.

Anybody dumb enough to finance their entire house with an ARM is getting what they deserved. I cant have sympathy for people who do that. But the biggest cost of inflation is most likely energy prices which we brought on ourselves by continuing to stick the foreign oil needle deeper into our veins.

I keep hearing lower real income but I am looking at some tables from the bea.gov website showing a 4.1% change from 2004-2005 in disposable income.

Isnt our inflation running about 3-3.5%?

Edit: btw I saw an interesting chart from the bea.gov website showing dividend paid and recieved. Up 16.5% from 2004 to 2005.

 

[dullard]

Originally posted by: Genx87
Isnt our inflation running about 3-3.5%?

May CPI numbers were recently ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt">released</a>. May 2005: 194.4, May 2006: 202.5

202.5 / 194.4 = 1.4166. 4.16% inflation rate in the last year.

Inflation is starting to rear its ugly head, which is why the fed still raised interest rates today. From that link:
[*]Average price in 2002 was 1.6% more than average price of 2001.
[*]Average price in 2003 was 2.3% more than average price of 2002.
[*]Average price in 2004 was 2.7% more than average price of 2003.
[*]Average price in 2005 was 3.4% more than average price of 2004.
[*]And now we are at 4.16%, although this is a slightly different way of calculating it since we don't yet know the average price of 2006.

Inflation was wonderfully low. But it has increased every year for the past few years. You would be correct if you said the historical inflation rate over the 93 years of data is just under 3.5%. But right now, we are just above that historical average. It isn't anything to panic about yet, but we should watch it and be careful.

 

[conjur]

Originally posted by: Engineer

Originally posted by: Genx87
It is hard to guage really. Who owns all the stocks and profits from the increased return the companies are seeing? The owners of the companies. Who owns the company? The biggest players are the mutual funds. Who puts their money into mutual funds? Your avg joe who is saving for retirement or has a 401K plan through his employer.

If that is the case and companies are showing profits up over 20+ percent year over year, why a stagnant market for nearly 6 years? Strong economy and strong profits. P/E ratio's sinking below historical averages.

Very simple explanation. We're on a receding portion of a Long Valuation Wave.

http://www.zealllc.com/2002/valu.htm

http://www.zealllc.com/2005/longwave2.htm

http://www.zealllc.com/2005/curse2.htm

http://www.zealllc.com/2006/curse3.htm

 

[conjur]

Originally posted by: dullard

Originally posted by: Genx87
Isnt our inflation running about 3-3.5%?

May CPI numbers were recently ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt">released</a>. May 2005: 194.4, May 2006: 202.5

202.5 / 194.4 = 1.4166. 4.16% inflation rate in the last year.

Inflation is starting to rear its ugly head, which is why the fed still raised interest rates today. From that link:
[*]Average price in 2002 was 1.6% more than average price of 2001.
[*]Average price in 2003 was 2.3% more than average price of 2002.
[*]Average price in 2004 was 2.7% more than average price of 2003.
[*]Average price in 2005 was 3.4% more than average price of 2004.
[*]And now we are at 4.16%, although this is a slightly different way of calculating it since we don't yet know the average price of 2006.

Inflation was wonderfully low. But it has increased every year for the past few years. You would be correct if you said the historical inflation rate over the 93 years of data is just under 3.5%. But right now, we are just above that historical average. It isn't anything to panic about yet, but we should watch it and be careful.

But that's with the new and improved fudge factors. Let's look at what inflation *really* is.

First off, what is this admin reporting?
ftp://ftp.bls.gov/pub/news.release/cpi.txt

During the first five months of 2006, the CPI-U rose at a 5.2 percent seasonally adjusted annual rate (SAAR). This compares with an increase of 3.4 percent for all of 2005.

Then, to account for the fudge factor:
http://www.gillespieresearch.com/cgi-bin/bgn/article/id=343

Traditional inflation rates can be estimated by adding 2.7% to the CPI-U annual growth rate (2.7% +2.7% = 5.4% as of August 2004) or by adding 3.3% to the C-CPI-U rate (2.1% + 3.3% = 5.4% as of August 2004).

So, that leaves us with 5.2% + 2.7% = 7.9% annual rate of inflation right now.

 

[dmcowen674]

Originally posted by: conjur

Originally posted by: dullard

Originally posted by: Genx87
Isnt our inflation running about 3-3.5%?

http://www.gillespieresearch.com/cgi-bin/bgn/article/id=343

Traditional inflation rates can be estimated by adding 2.7% to the CPI-U annual growth rate (2.7% +2.7% = 5.4% as of August 2004) or by adding 3.3% to the C-CPI-U rate (2.1% + 3.3% = 5.4% as of August 2004).

So, that leaves us with 5.2% + 2.7% = 7.9% annual rate of inflation right now.

Woo hooo double digit inflation left by the Bush Fan club

Of course if a Democrat gets in 2008 it will all be his or her fault.

If Republicans manage to keep power the lies and deception will continue.

 

[GrGr]

I read that the Fed has raised the rate by 5 % over the last two years. Will there be a 10 % rate in two years time? The last three times the US economy has been similar it has ended with a recession twice and an icy cool down once.

 

[dullard]

Originally posted by: jlmadyson

Originally posted by: dullard
Unfortunately, I think that is one more reason to think 2nd quarter growth will be dismal. It isn't that the economy is doing bad. But, the quarterly reporting happens to occasionally lump a bunch of spending together in one quarter and the two surrounding quarters look horrible. A little Dec spending was delayed until Jan so 4th Q 2005 looked horrible. A little Apr spending was done in Mar, so 1st Q 2006 looked wonderful. Of course, we know what that means to the 2nd Q 2006 GDP numbers. It'll look worse that it was, just like 4th Q 2005 looked worse than it was.

Could be the case, time will tell.

Well, time is showing it's preliminary data. GDP hits the breaks. Went from 5.6% to 2.5%. Not quite dismal as I had thought. But it is below expectations of 3% and it is the 2nd worst growth since 1Q 2003.

If you average the last four quarterly data points, we are at an average of 3.5% growth. Thus, 1st quarter 2006 just simply took the growth away from 4th quarter 2005 and 2nd quarter 2006. None of this is bad though, any growth above the population growth rate is good. But it just means 1st quarter 2006 was a statistical blip. It was high due to the timing of the data and not due to the actual fundamental growth being at 5.6%.

 

[Slew Foot]

"The GDP report also said core consumer prices -- excluding energy and food -- surged 2.9 percent last quarter"

Is that right? A ~12% annual rate? If you include food and energy its probably more than that too. Can you say a return to stagflation of the early 80s? Are 15% interest rates next?

 

[dullard]

Originally posted by: Slew Foot
"The GDP report also said core consumer prices -- excluding energy and food -- surged 2.9 percent last quarter"

Is that right? A ~12% annual rate? If you include food and energy its probably more than that too. Can you say a return to stagflation of the early 80s? Are 15% interest rates next?

No, that isn't right. The link I posted clearly says this: "prices paid by individuals for items excluding food and energy was up at a 2.9 percent annual rate".

Annual rate means it has already been adjusted for a full year period (roughly by multiplying the quarterly rate by four). Stagflation is a definate possibility with this current economy. But we certainly aren't there yet and there is time to avoid it.