US 3rd quarter GDP revised up to 5% - best in 11 years.

[Engineer]

http://finance.yahoo.com/news/us-economy-grew-fast-5-133648403.html

The Commerce Department on Tuesday sharply revised up its estimate of third-quarter growth from a previous figure of 3.9 percent. Much of the strength came from consumer spending on health care and business spending on structures and computer software.

It was the fastest quarterly growth since the summer of 2003. It followed a 4.6 percent annual growth rate in the April-June quarter.

Seems the US economy is doing much better than the rest of the world. Does this finally start to trickle down to the average person on the street or does it simply kick the FED into raising rates and doing nothing for the average Joe?

With more people working and having money to spend, solid gains are expected in consumer spending, which accounts for about 70 percent of the economy.

More money to spend? Are the US workers finally getting an uptick in wages or is this just another credit spike (which is up from last few years from what I read a few days ago)?

 

[Genx87]

As the job market gets better I expect wages to raise.
As for more money to spend. I would say having a job that pays more than not having a job would provide immediate increases in disposable income regardless if wages are keeping up.

But I do think wages will see an increase as we near the range of full employment.

 

[Blanky]

This is good but seems almost too good. Growth at that rate cannot be maintained for long. Hopefully it merely slows instead of going negative.

 

[Svnla]

I don't feel it around here. As a matter of fact, with the low price of oil lately, companies around here (Texas and Louisiana) are putting things on hold (no new wells and pipelines) and notifying employees about possible cut backs and/or layoffs.

 

[bshole]

I have come to expect this of Democratic regimes. They just do the economy so much better than the Republicans.

Svnla, you live in the South..... nuff said.

 

[fskimospy]

This is good but seems almost too good. Growth at that rate cannot be maintained for long. Hopefully it merely slows instead of going negative.

The risk with this would be inflation, but in our case right now we could use some additional inflation.

5% is fantastic by any measure.

 

[Sonikku]

Go GoP Senate, go!

 

[theeedude]

Thanks, Obama.
Time to change the course.

 

[HomerJS]

queue up Fox News stories for rest of week.

5% growth bad for the economy

 

[Doc Savage Fan]

Good news! But I'm still waiting for the trickle down.

 

[bshole]

Good news! But I'm still waiting for the trickle down.

Not me, I've never been better. Salary up, home value up, stock portfolio up, everything is turning up roses.

 

[piasabird]

Lower gas prices are similar to getting a raise in pay.

I still firmly believe all the stores are price gouging. It costs over $4 for a bag of chips at a grocery store and then $2.88 at Wal-Mart. I call that price gouging.

 

[berzerker60]

When the economy was crappy, we needed more government spending and lower taxes.

Now that the economy is getting better, we need higher taxes (especially highly progressive taxes) and less government spending. Especially the higher taxes.

I'm not holding my breath.

 

[fskimospy]

When the economy was crappy, we needed more government spending and lower taxes.

Now that the economy is getting better, we need higher taxes (especially highly progressive taxes) and less government spending. Especially the higher taxes.

I'm not holding my breath.

If the recovery continues and we start to see higher inflation and continuing lower employment, that is when we need to begin to implement austerity, yes. Not yet, but if trends continue then in the not too distant future.

 

[soundforbjt]

Fear not, the repubs take over the Congress in a few weeks, they'll get everything back to shit in no time.

 

[theeedude]

Lower gas prices are similar to getting a raise in pay.

I still firmly believe all the stores are price gouging. It costs over $4 for a bag of chips at a grocery store and then $2.88 at Wal-Mart. I call that price gouging.

They are just looking out for your health and creating incentives to not eat processed deep fried junk. Just get a potato and stick it into the microwave. Or slice it, brush with olive oil and bake. Much healthier and cheaper.

 

[s0me0nesmind1]

When the economy was crappy, we needed more government spending and lower taxes.

Now that the economy is getting better, we need higher taxes (especially highly progressive taxes) and less government spending. Especially the higher taxes.

I'm not holding my breath.

Where the fuck do you get your logic from?

More people working in the private sector = less government/public workers needed to manage?

 

[theeedude]

Fear not, the repubs take over the Congress in a few weeks, they'll get everything back to shit in no time.

That's what "we the people" voted for. :thumbsup:

 

[berzerker60]

Where the fuck do you get your logic from?

More people working in the private sector = less government/public workers needed to manage?

From economics, pseudoscience though it is.

During a bad economy, we need to increase government spending (not just government jobs, but also direct wealth transfers) and cut taxes so that consumers have money to spend on products and businesses have money to reinvest, spurring growth. But that creates government debt, which isn't a problem in and of itself, but over time you don't want the ratio of debt/GDP to get too high. So, in good times you have to reverse the process and pay down the debt - that is, cut the stimulus spending and increase taxes.

All that is premised on not having gutted the government and raised taxes during the bad times, like Europe did (and Republicans wanted to do), to disastrous effect. America didn't do nearly enough stimulus spending during this downturn, so there won't be much cutting back of spending that's realistic (in fact we probably need to increase it after the shutdown/sequester debacle, but that's unlikely), but it sure needs to raise progressive taxes much higher if the economy continues to improve. For example, to 1950s-1960s levels, when the booming economy helped everyone, before the supply side myth led to all the subsequent growth going into the pockets of the top 1%.

Basically, I'm just saying all those debt hawks who were harping on killing necessary government services during the bad times need to reject any "it's the people's money, give it back!" nonsense if we end up with a budget surplus over the next decade or so. That money should go to pay down the debt and invest in things like infrastructure so we can weather the next bad time.

 

[BoberFett]

They are just looking out for your health and creating incentives to not eat processed deep fried junk. Just get a potato and stick it into the microwave. Or slice it, brush with olive oil and bake. Much healthier and cheaper.

You realize of course that your healthier option is a job killer, right? Food processing creates jobs. Why do you hate American workers?

 

[gevorg]

Remember this? We had a thread on this some time back:

In March 2013, the U.S. government invented a new way of calculating GDP. The Financial Times reported that starting from July 2013, U.S. GDP would become 3% bigger due to a change in statistics.

The government made a significant change in the gross investment number (I), which now includes R&D spending, art, music, film royalties, books, theatre. This change in GDP statistics has not been implemented elsewhere in the world. So the U.S. is the first to accomplish this rewriting of the GDP number.

Research and development (R&D) spending, which shouldn't even be accounted for as investment, adds a significant amount to the U.S. GDP number. It accounts for around 2% of U.S. GDP. Art, music, film royalties, books and theatre add another 0.5% to U.S. GDP. Another adjustment has been made to pension accounting. Previously, pension spending was included in GDP. After this adjustment however, we also look at the "promise" to pay out pensions. So we are talking about imaginary numbers that are now included in GDP. A last example is found in real estate. Commissions, legal bills and expenditures on real estate transactions are included in GDP as "investment." Obviously these expenditures aren't associated with real production.
...
Source.

 

[berzerker60]

You realize of course that your healthier option is a job killer, right? Food processing creates jobs. Why do you hate American workers?

Or a job creator! Healthier workers => more profits and less spent on health care => more jobs in industries that aren't making are nation morbidly obese

You could even say those potato chips are like little job abortions. Require every chip-eater to get a trans-esophogal exam and explanation by his doctor about what his chip-eating means for American health care costs.

 

[berzerker60]

Remember this? We had a thread on this some time back:

Wait, why in the world should we not include R&D as investment? That's incredibly obviously an investment. Creates new technologies, creates new industries, creates better educated workers...

 

[fskimospy]

Remember this? We had a thread on this some time back:

What's your point?

 

[alcoholbob]

I'd be curious how it would look if we compiled the numbers using the methodology they used in either the 1970s or 1980s.