There is a lot to say about the latest GDP revisions, particularly as it relates to the breakdown of the measure in comparison with something besides itself. The headline was all that was needed to “confirm” the best economic growth in decades, though. “There is a positive feedback loop going on at the moment,” Mike Jakeman, global analyst for the [...]
I’m not sure what basis there is for expecting a robust holiday season. Even factoring the move in the unemployment rate and upward revisions to GDP in the past two quarters, none of that has done anything toward correlating with rising income. In fact, 2014 is conspicuous in that aspect more than at any time during this “recovery.” The latest [...]
It should not have come as a surprise to convention that the PCE component of GDP was not going to be leading economic gains. The monthly PCE series has been “better” in later 2014 than the winter, but that is far too narrow a context in which to draw any conclusions. No matter how you measure, American consumers continue to [...]
Continuing on with the theme of orthodox interpretation vs. context, in order to determine not just the relative position of the economy but how that relates to “markets” vis-à-vis bubbles, the current estimates of personal income and spending fit well within those rough confines as I have described them. The orthodox interpretation sees the changing growth rates in 2014 as [...]
Personal intuition usually serves well in both economics and finance, which is why, despite all the billions of dollars and amazing efforts otherwise, this business is still an art and not a “science” (even pseudo-). I should have remembered as such the last time I actually reported on a sentiment survey, as the Chicago PMI a few months back tumbled [...]
Following up on my earlier observations about a reduced trajectory, getting away from the thick trees of quarterly statistic movements and revision for the forest of patterns and paths, viewing the subcomponents of GDP as standalone accounts rather than contributors highlights exactly that problem. Whether you view the economy through real final sales (both of domestic product and to domestic [...]
Following up with some more detail on yesterday’s GDP euphoria, a closer examination reveals that not much has changed beneath the headline refiguring. Again, I highly doubt the 3.9% (plus some rounding) survives further estimations, but that really doesn’t much matter at this point. Whether it ultimately arrives at 5% or 2% won’t change the trends that are embedded beneath [...]
The two common themes that have emerged from this morning’s memorably rotten GDP report are weather and Obamacare. You know it is bad when mandatory health insurance purchases coupled with a surge in premiums gets PCE to only 1% below what might be considered weak growth. Beyond that, nearly all of the orthodoxy has declared first quarter GDP to be [...]
If one were to objectively at a broad range of data points, you might be tempted to declare, as the NBER does, a cycle peak for some time in mid-2012 (perhaps October?). Given yesterday’s update to GDP, increasing the growth rate by 0.8% to an illusory 3.6%, one might also conclude a peak in the mini-cycle. Of all the subcomponents, [...]
The BEA estimated that GDP in Q3 accelerated to 2.8% over Q2 2013, coincidentally matching the Q/Q growth rate from Q3 2012 (more on that in a moment). The largest “boosts” to GDP came from tumbling imports and growing inventories. Those two segments accounted for 1.2% in additional “growth” over Q2. While inventories rose and consumers and businesses bought less [...]
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