The ultimate lesson for learning not to rely on one quarter of GDP growth was actually two quarters. In the middle of 2014, GDP posted back-to-back gains that at the time seemed nothing less than fantastic. Even with residual seasonality revisions and new benchmarks, those two quarters remain prominent landmarks in an otherwise bleak landscape. And that is the whole [...]
Last year, the usual rebound in GDP was flipped. Q1’s are, or were before “residual seasonality”, the low mark followed by some surge at some point. In 2015, it was Q2 that originally jumped, hitting almost 4% in the original estimates. What followed in Q3 was frustration, as GDP was first figured to be only 1.5%. It was disappointing but [...]
With today’s retail sales report “mixed”, the Atlanta Fed now predicts Q3 GDP will be less than 2%. According to its GDPNow model, the weaker retail sales report, particularly the control group that enters the GDP calculation, will add up to just 2.6% Real PCE growth. In prior periods with actual growth, Real PCE has ranged from 4% to 5% [...]
When we talk about or estimate long run growth rates, we intend to encompass entire cycles. In other words, whatever the long run average of real GDP growth, for instance, it takes into account both recession and recovery to harmonize into what would be a constant trend or potential. From that view, we would expect that while growth would be [...]
There is absolutely no need whatsoever to pay any attention to what Janet Yellen says. There is even less call for parsing the increasingly ridiculous FOMC statement, particularly with regard to inflation where it will continue to suggest “professional forecasters” are the only way (left) to measure monetary policy effectiveness. Instead, four times a year the FOMC meeting coincides with [...]
The massive wildfires in Alberta earlier this year had a tremendously negative effect upon not just the oil sector but all of Canada. Not surprisingly, Canadian GDP released today was abysmal. Falling 1.6% in Q2, that was the worst quarter since 2009. Fortunately for the Bank of Canada who had been “stimulating” again since last July when it cut the [...]
The only economic data of note today was the notoriously unreliable personal income and spending figures. The data series contained within the suite are subject to not just major benchmark revisions but significant revisions within just the high frequency time frames. Perhaps the most pertinent example of this is the personal savings rate which has been revised all over the [...]
Second quarter 2016 GDP was revised slightly lower, from about 1.21% to just 1.09%. That changes nothing from the preliminary estimate, as real GDP has averaged now only 0.93% over the past three quarters since last summer’s major, global disruption. Since the FOMC declared risks “balanced” and heading toward “overheating” in late 2014, economic growth as measured by GDP has [...]
It wasn’t the introduction of statistics that led to the dire state of “science”, rather it was the jettison of common sense in favor of, and the total deference to, statistics. This was not a single event or a clean break, of course, as it happened slowly over decades. But in the 21st century what is often talked about and [...]
The words of the day are apparently “sluggish” and “challenging.” Overnight both Target and Cisco, bellwethers in retail and tech, respectively, were both the subject of intense scrutiny. Target released earnings that “beat” while revenues and really same store comps were particularly weak. Year-over-year, sales declined 7.2% total (revenues from Q2 2015 include Target’s pharmacy business which was sold to [...]
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