Economy forcast to grow in 3rd & 4th Quarter

[CADsortaGUY]

Business economists predict strong growth in second half

<snips>
The U.S. economy, after three years of lackluster growth, is poised to begin a sustained rebound that will start to cut the unemployment rate, the National Association for Business Economics (NABE) predicted Monday.
The group expects gross domestic product, the country's total output of goods and services, to grow at a 4.5% annual rate in the July-September quarter and a 4% rate in the October-December period.
...
The economy was hit by the bursting of the stock market bubble in the spring of 2000 and then by a recession that began in March 2001. Those events were followed by the September 2001 terrorist attacks, corporate accounting scandals and uncertainty generated by the war in Iraq.
...
The group credited monetary policy of the Federal Reserve Board, which has pushed the key interest rate target it controls down to a 45-year low, and President Bush's third round of tax cuts for providing the push the economy needed.
...
Absent inflationary pressures, the forecasters say they believe the Fed will be able to keep interest rates at current low levels for an extended period. Half say they do not expect a Fed rate hike until at least the May-July period next year.
</snips>

The whole thing is a pretty good read. Lets hope this "road to recovery" stays on track.

CkG

 

[DealMonkey]

Yup, we've gone from a jobless recovery to a job-loss recovery. Good thing I'm self-employed. The only one who can ship my job overseas is me. And, I'm strongly opposed to that action. In fact, I'll make a note to cover my policy at the next board meeting.

 

[Bowfinger]

Originally posted by: CADkindaGUY
[ ... ]
The whole thing is a pretty good read. Lets hope this "road to recovery" stays on track.

CkG

Hope so. I have too many friends and former employees who are still unemployed or under-employed.

 

[sMiLeYz]

It's about damn time.

 

[DealMonkey]

Lagging indicators? Clinton policies finally kicking in? Hmmmmm...

 

[CADsortaGUY]

Originally posted by: DealMonkey
Clinton policies finally kicking in?

Could be ...along with what they stated(Tax cuts and Fed policies).

CkG

 

[CADsortaGUY]

Bump with more info to decipher

CkG

 

[Corn]

This news is surely gonna piss off BOBDN. Besides, its all probably just a lie.

 

[lozina]

I've become desensitized to the false hopes these groups keep repeating. I will not let myself get fooled again by another research groups predictions. My optimistic side had the floor for the past 2 years and he's always been wrong, so now it's time to give my pessimistic side his turn.

 

[xxxxxJohnGaltxxxxx]

Originally posted by: Corn
This news is surely gonna piss off BOBDN. Besides, its all probably just a lie.

Bush makes us report inflated GDP figures, didn't you know? ..next lie is published September 26...stay tuned

 

[Vic]

Still no new jobs, rising consumer debt for the 1st time in any recession in modern history, "disinflation" is still a threat, and long term rates rising. Good luck on that recovery.

 

[CADsortaGUY]

Feds keep rates the same

<snip>
"The Committee continues to believe that an accomodative stance of monetary policy, coupled with robust underlying growth in productivity, is providing important ongoing support to economic activity," the Federal Open Market Committee said.
</snip>

Vic - yes deflation is a concern, but only if people keep spouting pessimism. Optimism is the key to recovery. I sometimes question people's motives when they continually spout negativism.

CkG

 

[xxxxxJohnGaltxxxxx]

Originally posted by: Vic
Still no new jobs, rising consumer debt for the 1st time in any recession in modern history, "disinflation" is still a threat, and long term rates rising. Good luck on that recovery.

If disinflation were still an imminent threat, the Federal Reserve would not have held interest rates @ 1% today...check the student loan thread in Hot Deals...I called that last 1/2% reduction a week out, in an effort to combat disinflation pressures So in short, it may sound good to you ("the sky is Falling"), economic reality suggests otherwise.

 

[xxxxxJohnGaltxxxxx]

Thanks, CK...I shouldn't have taken that last smoke break and let you beat me to that...good job, sir

 

[Vic]

Originally posted by: CADkindaGUY
Vic - yes deflation is a concern, but only if people keep spouting pessimism. Optimism is the key to recovery. I sometimes question people's motives when they continually spout negativism.

CkG

My "motive" is to encourage people to save more and spend less. To practice sound financial management instead of scrambling to find better ways to service their ever-mounting debt. America is a nation that, as a whole from personal to federal, lives beyond its means. Until that growing problem is addressed, it is unlikely that you will hear much optimism from me.
And I question your optimism. What will happen to you if the big recovery doesn't take place? Or are you saying that you have no vested interest?

 

[CADsortaGUY]

Originally posted by: Vic

Originally posted by: CADkindaGUY
Vic - yes deflation is a concern, but only if people keep spouting pessimism. Optimism is the key to recovery. I sometimes question people's motives when they continually spout negativism.

CkG

My "motive" is to encourage people to save more and spend less. To practice sound financial management instead of scrambling to find better ways to service their ever-mounting debt. America is a nation that, as a whole from personal to federal, lives beyond its means. Until that growing problem is addressed, it is unlikely that you will hear much optimism from me.
And I question your optimism. What will happen to you if the big recovery doesn't take place? Or are you saying that you have no vested interest?

It is in EVERYONE's best interest that this recovery happen....except for maybe the 10 dwarves

I understand concerns about financially responsible spending - but what I see is that people are spouting only the negatives of the economy which only serves to bring down consumer confidence. There are MANY factors to this recovery - consumer spending/confidence is a big one though. So to just ignore the "good" signs in the other areas, or drowning them out with "unemployment" scare mongering doesn't help things at all.

CkG

 

[Vic]

Originally posted by: CADkindaGUY
It is in EVERYONE's best interest that this recovery happen....except for maybe the 10 dwarves

I understand concerns about financially responsible spending - but what I see is that people are spouting only the negatives of the economy which only serves to bring down consumer confidence. There are MANY factors to this recovery - consumer spending/confidence is a big one though. So to just ignore the "good" signs in the other areas, or drowning them out with "unemployment" scare mongering doesn't help things at all.

CkG

I agree somewhat. But if "optimism" means encouraging people at large to load on another $10k in credit card debt each (which is just about the only place that consumer spending is going to come from right now), then count me out.

 

[xxxxxJohnGaltxxxxx]

Originally posted by: Vic
Still no new jobs, rising consumer debt for the 1st time in any recession in modern history, "disinflation" is still a threat, and long term rates rising. Good luck on that recovery.

Originally posted by: CADkindaGUY
Vic - yes deflation is a concern, but only if people keep spouting pessimism. Optimism is the key to recovery. I sometimes question people's motives when they continually spout negativism.



CkG

My "motive" is to encourage people to save more and spend less. [/quote]



So, in other words, your "motive" is to bankrupt the American economy? I am sure you aren't running the Federal Reserve, given that you would combat disinflation by encouraging people to spend less...draw up a supply/demand chart with excess capacity labeled and I'll nominate you for a Nobel Prize. Nash has nothing on you.

 

[Vic]

Actually, xxxxxJohnGaltxxxxx, when it comes to this BBS, my motive is to ignore little lying trolls like yourself. Unfortuantely, I frequently fail at that, which is why I am answering you now.
The current cause of disinflation in this cycle is not just because consumers are not spending, but because they simply don't have any more left to borrow and spend. They are mortgaged to the hilt and in debt up past their ass. Your simple solution, it seems, is just that they spend more. You seem to forget that saving and investing is just as crucial to the economy as spending and borrowing.

edit: in short, IMO, you're the type trying to bankrupt America. The bill always comes due someday. But as long as its not today, I guess you don't care, eh?

 

[CADsortaGUY]

Originally posted by: Vic
The current cause of disinflation in this cycle is not just because consumers are not spending, but because they simply don't have any more left to borrow and spend. They are mortgaged to the hilt and in debt up past their ass. Your simple solution, it seems, is just that they spend more. You seem to forget that saving and investing is just as crucial to the economy as spending and borrowing.

Saving and Investing IS a very important part of the economy. However, in recession recovery spending helps to bolster the recovery. What I see in all this is that the Outrageously overinflated tech industry's collapse not only caused a seemingly never ending slide in employment numbers which spread across many markets - it also caused people's spending habbits to change in the "rich 90's". People seemed to quickly grow accustomed to salaries that were WAY overinflated due to the boom. Now that the market has recentered itself those same people aren't spending and spending. Corporations are looking at the boom&bust and thinking twice(if not 10X) about spending and/or taking risk to expand. Only time will heal this protectionary retraction. We are now starting to see a few areas starting to show a willingness to grow - I can only hope that they can sustain such growth.
I just wish people wouldn't keep fighting this market - lets just let it take off

CkG

 

[Ferocious]

The tax cuts are pretty much a joke.

My boss and several small business owners I know are going to get a rough average of $15,000 of extra tax relief.

The one garage owner I know is going to make his p/t secretary into a f/t one.

The others are simply going to spend it and buy stuff......which is all and nice....but middle class America could have spent money as well.

 

[xxxxxJohnGaltxxxxx]

Originally posted by: Vic
Actually, xxxxxJohnGaltxxxxx, when it comes to this BBS, my motive is to ignore little lying trolls like yourself. Unfortuantely, I frequently fail at that, which is why I am answering you now.
The current cause of disinflation in this cycle is not just because consumers are not spending, but because they simply don't have any more left to borrow and spend. They are mortgaged to the hilt and in debt up past their ass. Your simple solution, it seems, is just that they spend more. You seem to forget that saving and investing is just as crucial to the economy as spending and borrowing.

edit: in short, IMO, you're the type trying to bankrupt America. The bill always comes due someday. But as long as its not today, I guess you don't care, eh?

Spin it anyway you want, Vic...you said disinflation is a threat and you want people to spend less money...Moreover, don't ever assume I am forgetting something. I merely responded to your preposition of fact--that disinflation is a threat--then I responded to your cure--spend less. I didn't know you want a whole lesson in monetary policy and advanced economics. If you do, PM me and perhaps we can meet one evening a week and I'll tutor you here in D.C. for a nominal fee.

 

[CADsortaGUY]

Originally posted by: Ferocious
The tax cuts are pretty much a joke.

My boss and several small business owners I know are going to get a rough average of $15,000 of extra tax relief.

The one garage owner I know is going to make his p/t secretary into a f/t one.

The others are simply going to spend it and buy stuff......which is all and nice....but middle class America could have spent money as well.

OK, so what would classify as NOT a "joke" in your mind?
$15000 is a joke? It sure as hell wouldn't be a joke to me. My tax cut is just fine(could always be bigger though) and I am most likely on the lower end of the "middle class".
Obviously the tax cuts give more $ to the "rich", but guess who pays the most in taxes?:Q Now if the rich got a 10% reduction in income tax and us poor beggers only got 1%, then that would classify as "only for the rich" in my mind. THAT isn't the case here. People in the lower brackets ARE getting the "benefits" of the tax cuts. What is it - like the bottom 50% of tax payers(you know...people who actually pay IN) only pay ~4% of Income tax.:Q

CkG

 

[glugglug]

Ah, so the Bush administration paid off/threatened some economists to predict good things again is my bet. At least in the short term, this should work, as the stock market and to some extent the economy as a whole is based on like 98% perception. That 2% will catch up to us before too long though. The end of this year might have some nice numbers, but I predict 2004 to be a bloodbath.

 

[Vic]

Originally posted by: xxxxxJohnGaltxxxxx
Spin it anyway you want, Vic...you said disinflation is a threat and you want people to spend less money...Moreover, don't ever assume I am forgetting something. I merely responded to your preposition of fact--that disinflation is a threat--then I responded to your cure--spend less. I didn't know you want a whole lesson in monetary policy and advanced economics. If you do, PM me and perhaps we can meet one evening a week and I'll tutor you here in D.C. for a nominal fee.

Seems like the spinning works both ways, because it seems to me that the current downturn has been caused by a reduction in investment and in corporate spending... NOT consumer spending. In fact, consumer spending has continued as usual except that their habits have changed (i.e. from Nordstroms to Wal-Mart), and it is only in that habit change (and a reduction in consumer technology spending -- also a habit change but more indicative as a lack of desire at large which the members of this BBS do not share) that has caused the threat of disinflation.
BTW, that consumers spend less is not my "cure" for our short term ails. That we will ail in the short term is not a certainty to me but a perceived necessity. Because if we keep spending what we do not have simply to maintain the appearance of a robust economy, then the only long-term result will be complete economic collapse when the servicing on the debt eventually exceeds actual income. All economies work in cycles. Last decade we missed a cycle, so now we have to double up.

"One definition of an economist is somebody who sees something happen in practice and wonders if it will work in theory." - Ronald Reagan