1st Quarter GDP revised upward to 5.6%

[conjur]

China parliament official calls for cut in US debt holdings
http://www.forbes.com/markets/feeds/afx/2006/04/03/afx2644229.html

BEIJING (AFX) - China should gradually cut its holdings of US debt, a senior Chinese parliament official said.

Cheng Siwei, vice-chairman of the National People's Congress, was quoted by the Wen Wei Po as saying in Hong Kong that Beijing should stop buying US debt and cut its current holdings.

He also said that China should increase purchases of US goods to help reduce the trade imbalance, according to the Hong Kong newspaper.

Cheng added that all of these moves should be carried out gradually.

China held 256.7 bln usd worth of US treasury debt as of the end of last year, making it the second largest holder. Last year, China's net purchases of US treasurys stood at 38.7 bln usd, accounting for half of all net purchases of US treasury bills and bonds.

On the surface it looks like China realizes our trade deficit is not healthy in the long-term but talk is cheap. But, if they start cutting their purchases of US debt and don't reciprocate by buying more American products, that's going to put a world of hurt on the US checkbook.

 

[ntdz]

Originally posted by: conjur
China parliament official calls for cut in US debt holdings
http://www.forbes.com/markets/feeds/afx/2006/04/03/afx2644229.html

BEIJING (AFX) - China should gradually cut its holdings of US debt, a senior Chinese parliament official said.

Cheng Siwei, vice-chairman of the National People's Congress, was quoted by the Wen Wei Po as saying in Hong Kong that Beijing should stop buying US debt and cut its current holdings.

He also said that China should increase purchases of US goods to help reduce the trade imbalance, according to the Hong Kong newspaper.

Cheng added that all of these moves should be carried out gradually.

China held 256.7 bln usd worth of US treasury debt as of the end of last year, making it the second largest holder. Last year, China's net purchases of US treasurys stood at 38.7 bln usd, accounting for half of all net purchases of US treasury bills and bonds.

On the surface it looks like China realizes our trade deficit is not healthy in the long-term but talk is cheap. But, if they start cutting their purchases of US debt and don't reciprocate by buying more American products, that's going to put a world of hurt on the US checkbook.

China only owns $256 billion of our debt? BFD.

 

[conjur]

Yeah...that's only the amount of money spent on Iraq over the last 3 years. No biggie.


:roll:

 

[jlmadyson]

Economy rebounds with 4.8% annual growth rate in Q1; GDP strongest since 2003, inflation weakens

WASHINGTON (AP) ? Casting off an end-of-year lethargy, the economy bounded ahead in the opening quarter of this year at a 4.8% annual pace, the fastest pace of growth in 2 1/2 years.

The latest report on the economy, released by the Commerce Department on Friday, showed that consumers, businesses and government all did their part in terms of robust spending and investment to spur a healthy pace of growth in the January-to-March quarter.

The 4.8% increase in the gross domestic product marked a vast improvement from the feeble 1.7% annual rate registered in the final quarter of 2005, when fallout from the Gulf Coast hurricanes, including high energy prices, prompted people and companies to tighten their belts.

The GDP measures the value of all goods and services produced within the United States and is considered the best barometer of the economy's fitness.

The first quarter's performance ? the best showing since the third quarter of 2003 ? was close to economists' expectations. Before the report was released, private analysts were forecasting the economy to clock in at a 4.9% growth rate.

A recent spate of good economic reports, however, hasn't helped President Bush's standing with the public. He is shouldering his lowest-ever job approval rating, at 36%, according to an AP-Ipsos poll.

Even with the economy zipping ahead in the first quarter, inflation actually moderated.

An inflation gauge closely watched by the Federal Reserve showed that core prices ? excluding food and energy ? rose 2%, down from 2.4% in the fourth quarter.

The inflation reading, however, was taken before oil prices zoomed to a record high of more than $75 a barrel last week. Although prices have retreated since then, they still remain high.

To keep inflation at bay, the Fed is expected to boost interest rates again at its May 10 meeting, which would mark the 16th increase since June 2004. But after that, the central bank could take a break ? perhaps temporarily ? in its rate raising campaign, Fed Chairman Ben Bernanke suggested Thursday.

Bernanke and other Fed policymakers indicated that they want to proceed with caution because they don't want to hurt economic activity by pushing rates up too high.

Well, I guess the 1.7% for Q4 (final btw time to update this thread) was a bit of an anomaly. Overall pretty much in line with expectations with inflation weakening a bit.

 

[Engineer]

Outstanding bounceback from the 4th quarter. Possibly a pickup from the drop, but, nonetheless, outstanding.

Inflation data could be a little misleading depending on what the "current" energy prices are going to do to it. With a cooling housing market, however, inflation migh just stay tame.

 

[jlmadyson]

Originally posted by: Engineer
Outstanding bounceback from the 4th quarter. Possibly a pickup from the drop, but, nonetheless, outstanding.

Inflation data could be a little misleading depending on what the "current" energy prices are going to do to it. With a cooling housing market, however, inflation migh just stay tame.

I don't know I believe there still is some overall inflation concerns although the Fed has recently indicated the possibility of a pause in rate increases.

 

[zendari]

Originally posted by: Engineer
Outstanding bounceback from the 4th quarter. Possibly a pickup from the drop, but, nonetheless, outstanding.

Inflation data could be a little misleading depending on what the "current" energy prices are going to do to it. With a cooling housing market, however, inflation migh just stay tame.

Core inflation is going to be low and stay low for some time. I'm glad to see the economy chugging along.

The Dow hit a new high a couple days ago.

 

[BaliBabyDoc]

First-quarter GDP performance was boosted by increased government spending on reconstruction in the wake of last year's devastating hurricanes on the Gulf Coast. Federal government spending shot up at a 10.8 percent rate, a sharp contrast to the 2.6 percent rate of decline in the fourth quarter. It was the strongest government spending since a 22.1 percent jump in the second quarter of 2003.

Wow! That's a strong economy . . . just stoking that fire with more deficit dollars. I forget . . . why was this a VERY BAD idea when Clinton wanted to try it but it's great policy now?

 

[ntdz]

Lets see, now the Dow is at a 6 year high, and our economy just grew at 4.8% in the first quarter, and inflation is staying low. Good economy if you ask me, but if you ask the liberals it's terrible.

 

[charrison]

Originally posted by: ntdz
Lets see, now the Dow is at a 6 year high, and our economy just grew at 4.8% in the first quarter, and inflation is staying low. Good economy if you ask me, but if you ask the liberals it's terrible.

And top it off, this quarters growth caused the debt to gdp ratio to drop half a point to 65.5.

 

[Engineer]

The economy is growing strong. Workers lagging behind (behind GDP, profits, INFLATION).

Economy's growth is strong, but workers wouldn't know it
The release of two government reports this morning provides a compelling look at what is right and wrong with the U.S. economy. The nation's gross domestic product (GDP), the broadest measure of the economy's strength, rose at an annual rate of 4.8% in the first quarter of the year, the fastest growth rate since the third quarter of 2003. At the same time, worker compensation rose only 2.4%, the slowest growth rate in seven years and well below inflation. The economy is doing fine, but most of the people working in it aren't faring so well.

 

[jlmadyson]

Q1 GDP growth fastest in 2-1/2 years

WASHINGTON (Reuters) - The U.S. economy shot forward at an upwardly revised 5.3 percent annual rate in the first quarter, the fastest growth in 2-1/2 years, as companies built up inventories and exports strengthened, a Commerce Department report on Thursday showed.

First-quarter growth in gross domestic product was more than triple the 1.7 percent annual rate recorded in last year's fourth quarter, though still slightly below Wall Street economists' forecasts for a 5.7 percent pace.

Prices remained in check, with the core personal consumption expenditures price index that the Federal Reserve favors rising at a 2 percent rate compared with 2.4 percent in the fourth quarter.

The first-quarter surge in GDP - the largest since a 7.2 percent jump in the third quarter of 2003 - was partly fueled by rebuilding in the hurricane-battered Gulf Coast region. Growth is widely forecast to level off in coming quarters to a range of between 3 percent and 4 percent.


A sharper buildup in inventories than previously thought during the first three months of 2006 accounted for much of the upward revision in growth.

Companies built up inventories at a $32.3-billion annual rate instead of the $21.9 billion rate reported last month, moderately less than the $37.9-billion rate posted in the fourth quarter.

In addition, exports were stronger than originally reported, rising at a 14.7 percent annual rate rather than 12.1 percent.

This was the second reading of economic growth for the first three months of the year. The government revises the data twice after each initial estimate and its final tally of first-quarter performance will not be available for another month.

Somewhat surprisingly, spending on housing was moderately stronger than had been initially thought, growing at a revised 3.1 percent rate instead of 2.6 percent estimated a month ago. Fed Chairman Ben Bernanke told Congress last month that one of the reasons economic growth was likely to moderate in coming months was that housing markets were showing signs of softening.

The GDP report pointed to another reason for anticipating slower future growth, noting that wages and salaries were under pressure.

It said the advance in real disposable personal income slowed to an estimated 2.1 percent pace in the first quarter from 5.1 percent in the fourth quarter. Both estimates were revised down from a previously reported 6.7 percent and 3.2 percent respectively.

Personal consumption spending, which fuels two-thirds of national economic activity, grew at a 5.2 percent annual rate in the first quarter, down from the 5.5 percent reported a month ago. The pace was still far ahead of the slim 0.9 percent fourth-quarter growth and was the fastest clip in 2-1/2 years. Consumer spending was one of the primary reasons overall GDP performance accelerated to such a brisk pace in the period.

Revised Q1 5.3%

 

[dullard]

Originally posted by: jlmadyson
Revised Q1 5.3%

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.

 

[jlmadyson]

Originally posted by: dullard

Originally posted by: jlmadyson
Revised Q1 5.3%

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.

 

[Genx87]

Wow 5.3%? That is a big jump in growth. I would be thrilled if we managed to keep that up through the end of the year. Be the biggest economic growth in a 12 month period we have had since what, the 1980s?

 

[Slew Foot]

Looking through the data, savings rate dropped to -1.3%. The economy is living off credit cards, when it's time to pay the man, it's going to crash hard. My gut feel is that people are spening about the same as they have been on "the necessities", except the higher energy prices are increasing the GDP.

 

[jlmadyson]

Originally posted by: Genx87
Wow 5.3%? That is a big jump in growth. I would be thrilled if we managed to keep that up through the end of the year. Be the biggest economic growth in a 12 month period we have had since what, the 1980s?

Yea, 5.3% is seriously rolling along. Some correction will almost certainly be in place by end of year I would imagine. It's a double edged sword however due to interest rate fears.

 

[blackllotus]

Originally posted by: Genx87
If your company is stupid enough to freeze wages when the job market is like it is, find another place to work.

Yea because the job market is just so great now... right? Then why do so many people still have problems finding jobs (I'm not talking about ****** cashier jobs, I'm talking about jobs where people can utilize their experience and qualifications)? There is a job shortage in the U.S because all the major companies are outsourcing, and no, they aren't outsourcing because of a lack of workers, they are outsourcing because it is cheaper. Economic growth is meaningless if the only beneficiaries are the rich.

 

[Genx87]

Originally posted by: blackllotus

Originally posted by: Genx87
If your company is stupid enough to freeze wages when the job market is like it is, find another place to work.

Yea because the job market is just so great now... right? Then why do so many people still have problems finding jobs (I'm not talking about ****** cashier jobs, I'm talking about jobs where people can utilize their experience and qualifications)? There is a job shortage in the U.S because all the major companies are outsourcing, and no, they aren't outsourcing because of a lack of workers, they are outsourcing because it is cheaper. Economic growth is meaningless if the only beneficiaries are the rich.

What part of the country do you live in? And what kind of job are you talking about?

 

[zendari]

Originally posted by: blackllotus

Originally posted by: Genx87
If your company is stupid enough to freeze wages when the job market is like it is, find another place to work.

Yea because the job market is just so great now... right? Then why do so many people still have problems finding jobs (I'm not talking about ****** cashier jobs, I'm talking about jobs where people can utilize their experience and qualifications)? There is a job shortage in the U.S because all the major companies are outsourcing, and no, they aren't outsourcing because of a lack of workers, they are outsourcing because it is cheaper. Economic growth is meaningless if the only beneficiaries are the rich.

Aww, more liberals trying to discredit our booming economy.

 

[jlmadyson]

Originally posted by: blackllotus

Originally posted by: Genx87
If your company is stupid enough to freeze wages when the job market is like it is, find another place to work.

Yea because the job market is just so great now... right? Then why do so many people still have problems finding jobs (I'm not talking about ****** cashier jobs, I'm talking about jobs where people can utilize their experience and qualifications)? There is a job shortage in the U.S because all the major companies are outsourcing, and no, they aren't outsourcing because of a lack of workers, they are outsourcing because it is cheaper. Economic growth is meaningless if the only beneficiaries are the rich.

I don't really buy the whole no good jobs argument right now. Not with 4.7% or 4.8% unemployment rate and 728,000 jobs created in the first four months of this year thus far. These jobs aren't merely burger flipping jobs either. See my other thread on payrolls for this year and hash it their;

Text

 

[dmcowen674]

Originally posted by: zendari

Originally posted by: blackllotus

Originally posted by: Genx87
If your company is stupid enough to freeze wages when the job market is like it is, find another place to work.

Yea because the job market is just so great now... right? Then why do so many people still have problems finding jobs (I'm not talking about ****** cashier jobs, I'm talking about jobs where people can utilize their experience and qualifications)? There is a job shortage in the U.S because all the major companies are outsourcing, and no, they aren't outsourcing because of a lack of workers, they are outsourcing because it is cheaper. Economic growth is meaningless if the only beneficiaries are the rich.

Aww, more liberals trying to discredit our booming economy for rich Republicans only.

Corrected

 

[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?

 

[Genx87]

What a fake economy we live in.

 

[jlmadyson]

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?

Yea, just wondering what Q2 is going to look like.