Growth? Some of my mutual funds returned -10% for the first 3 quarters of 2018. I have a degree in economics and I know that a growth figure with a minus sign does not mean "growth".
6
I guess you have to worry about something.
I work that we are in a disquieting period where the Fed's actions could be right or completely wrong. And everything goes to hell.
But objectively the data looks good for the economy.
Charged Ahead? For Whom did it charge ahead for?
2
This quote from the article says it all: "Businesses remain hesitant to increase spending, despite the large corporate tax cut enacted late last year. Some of the gains were also one-offs that could fade quickly, like the restocking of shelves at stores and warehouses, which contributed more than half of the overall growth." And an electorate with a few extra bucks in their pockets from tax cuts but stagnated wages think they are doing economically well. You can fool most of the people most of the time!
3
The economy has had the best 3 quarters of growth (averaging 3.3% on an annualized basis) since ...er, the 4% average recorded in the last 3 quarters of 2014. But we will probably get more than 3% in the current calendar year for the first time since 2005 (though nowhere near the 3.8% spurt seen from Q2/14 thru Q1/15). "Spurt" may be the operative word here, because high growth over periods of much more than a year has been elusive for some time. The tax cuts were sold to us on the premise that they would "transform" the economy to sustained higher growth levels, that would in turn generate more federal revenue. This will require the consumer to increase spending each year, even as the effects of the tax cut wears off. Also, business investment must rebound from it's slump in the last quarter. If both of these things do not occur, we will look back on this as nothing more than another growth "spurt", albeit one paid for with ever increasing deficits.
3
A couple of years ago, I conveyed the idea of expanding inventories beyond actual sales to put downward pressure on unit prices resulting in greater sales volumes. Apparently others thought the same thing and put their tax cuts to work overproducing products. It has to be sustained or the unit prices will rise again. If it isn't, a glut of products will hold back expansion.
Next up; expand business hours to weekends and additional shifts to hire more people, even part time as second jobs, to create and expand demand for products. Take advantage of 24/7/365 online shopping allowing anyone to buy "Stuff" at any time.
Amazin' dot com had the great idea to include Sunday mail deliveries of packages. Other traditional shippers should also hire part time weekend people to expand deliveries of products to seven days.
If these or similar ideas are not adopted and put in place, the succeeding quarters growth may decline due to a glut of inventories that now exist because of the tax breaks.
Oh, and "Buy" the way! extend retail operating hours and they will come if you let the consumers know you're open. Make every day black Friday.
How to measure a great economy? Well, how much of the labor force is working. That is anyone 65 and under.
https://tradingeconomics.com/united-states/labor-force-participation-rate
Today it is 62.7%. It peaked right before 9/11 at just under 67%. For the pat three years it has been hovering in the 62% range.
Where are nearly 5% of worker? Forced to retire, because of age discrimination. Also, what this chart doe snot give you, is that the job lost in 2002 never came back, and the jobs mix today, are mostly lower paying jobs. Some people are working multiple jobs, also not reflected here.
If the economy is great, as Trump and the government says it is, then why is job participation rate flat? After each pull back, the rate went back up, except since 2007 (after the faux tax cut incentives wore out and the Great Recession beginning in December, 2007).
President Obama saved us from a calamity. Trump is undoing everything that was done to start a new calamity. Sort of what the GOP did in 1938, to extend the Great Depression. That took to 1952 for the Great Depression ills to end. History is repeating itself, but, unlike the 1950s, tax receipts are far less, thus making whatever coming as bad as the 1930s.
6
We just had a ONE TRILLION tax cut. It would be next to impossible not to see growth in the short term.
12
@Darren McConnell
Stocking inventories in the face of impending tariffs is not economic growth!
10
With inflation understated - see shadowstats.com which calculates figures using original metrics (inflation is 6% by 1990 metrics and 10% by 1980 metrics), GDP is grossly overstated. It's been NEGATIVE for most of the last 25 years. Anyone shopping for food has been seeing just how 'low' inflation has really been - lol.
Meanwhile unemployment has been over 20% since the 2008 crash. How many people are out of the workforce or grossly underemployed? Yeah for the 'gig' economy, minimal or no benefits and part time jobs.......
Both parties learned it was easier to lie abut stats (via clever 'reformulation') than actually improve things.
5
When Trump got elected I thought the stock market would tank, and the economy would drop into recession. I was in good company. Paul Krugman and many other thought the same thing. We were wrong. The economy turns out to be less predictable beast than we had thought.
Now many of the commentators here are talking about sugar highs, temporary boost with debt, etc. I ask them to reflect and remember: when Trump was elected, did they think the economy would continue to expand, unemployment drop, and the stock market boom? If you think you called it right, go back and read your emails and postings. You may be surprised.
The hard fact is we can't get a good handle on what's likely to happen. The old models aren't working very well. A high degree of humility is appropriate.
2
Or, we could read the whole article as well as the one beneath it on the stock market “correction,” that so far has dumped every gain made for the year.
2
@Cynical Jack: Please remember to re-read your post in a couple of years. I promise to re-read mine.
Funny what injecting a nearly $2 trillion dollar sugar high into the economy will do. What happens when it wears off and we're stuck with huge deficits?
11
The concern is about sustainable growth, which is a function of population growth and productivity, so around 2%. We can always boost that temporarily with debt, which is Trump's basic strategy. We could also boost that with more immigration, especially with millions of job openings, but I digress.
Trump has increased the 2018 deficit by about 60% vs. the CBO forecast when he took office, and the 2018-2027 debt addition by about 50%. State and local governments have also boosted their spending.
Contributions to the 3.5% growth in Q3 2018, vs. average quarter from Q1 2014 to Q1 2018:
Consumption 2.7 vs. 2.0
Inventories 2.1* vs. -0.1
Government 0.6 vs. 0.2
Non-residential investment 0.1 vs. 0.5
Residential investment -0.2 vs. 0.2
Net Exports -1.8** vs. -0.5
*The inventory build was highly unusual. It will reverse.
**The net exports were a reversal of the highly unusual boost of 1.2 in Q2, which was due to concerns about trade wars that brought exports forward.
For those keeping score, Obama had 12 quarters with over 3% GDP growth, including four with over 4% growth. His best quarter was 5.1% in Q2 2014.
P.S. From 2010-2014, Obama and his Republican Congress kept spending flat at the $3.5 trillion level inherited from Bush, so government averaged a -0.4% drag on the economy, slowing the recovery. The deficit fell to below historical average as % GDP by 2014. Contrast that with the 0.6% positive from government spending now.
8
In an otherwise accurate article, one comment seems troubling: first, "many trends, like falling unemployment, were firmly in place under his predecessor, President Barack Obama". First what "trends" were in place? And unemployment fell much more slowly (in percentage vs. absolute numbers) over his 8-year tenure vs. the last 20 months under the current administration. Second, the author did not mention that President Obama is the first President (since tracking this data began in 1947) to preside over an economy that never achieved 3% annual GDP growth. It is highly likely that the US economy will achieve 3% annual growth for 2018. I will be curious to see how much this is covered this time next March if it comes to pass.
@Chris Little I'm sorry, but you clearly don't understand how Recessions work, especially the one we faced in 2008-2009. You think Trump deserves more credit for brining the unemployment rate down 1% over 2 years versus Obama bringing it down from 10% to 4.8% during the recovery?
8
@Chris Littel
The magnitude is important. It requires a larger number of jobs created (absolute value) to affect each percentage drop in the unemployment when the total unemployment is high. For jobs created, the last 20 months look about the same as most 20 month periods under Obama.
https://blogs-images.forbes.com/niallmccarthy/files/2018/08/20180802_Job...
Perhaps you should "lecture" Wall Street instead of the NYT.
3
@Chris Littel: But there were 4 consecutive quarters of growth that averaged 4% from Q2/14 thru Q1/15 and 5 consecutive quarters of growth that averaged 3.8% from Q2/14 thru Q2/15. Obama did indeed fail to align that growth with a calendar year though. BTW: That streak ended with the collapse in oil prices causing a recession in the oil and gas industry, which I suppose illustrates the fact that GDP growth is never totally within the President's control. Even more so, when congressional leaders proclaim total commitment to the President's failure.
The concern is about sustainable growth, which is a function of population growth and productivity, so around 2%. We can always boost that temporarily with debt, which is Trump's basic strategy. We could also boost that with more immigration, especially with millions of job openings, but I digress.
Trump has increased the 2018 deficit by about 60% vs. the CBO forecast when he took office, and the 2018-2027 debt addition by about 50%. State and local governments have also boosted their spending.
Contributions to the 3.5% growth in Q2 2018, vs. average quarter from Q1 2014 to Q1 2018:
Consumption 2.7 vs. 2.0
Inventories 2.1* vs. -0.1
Government 0.6 vs. 0.2
Non-residential investment 0.1 vs. 0.5
Residential investment -0.2 vs. 0.2
Net Exports -1.8** vs. -0.5
*The inventory build was highly unusual. It will reverse.
**The net exports were a reversal of the highly unusual boost of 1.2 in Q2, which was due to concerns about trade wars that brought exports forward.
For those keeping score, Obama had 12 quarters with over 3% GDP growth, including four with over 4% growth. His best quarter was 5.1% in Q2 2014.
P.S. From 2010-2014, Obama and his Republican Congress kept spending flat at the $3.5 trillion level inherited from Bush, so government averaged a -0.4% drag on the economy, slowing the recovery. The deficit fell to below historical average as % GDP by 2014. Contrast that with the 0.6% positive from government spending now.
5
Correction:
"Contributions to the 3.5% growth in Q3..."
Commerce Department reporting? Wilbur Ross' department? I do not know enough about how these numbers could be fudged, but I think it is not only possible but probable that at some time in this administration key national statistics will be incorrectly reported.
1
@Katie: Funny you should mention figures being incorrectly reported, but in April, the Monthly Treasury Statement (MTS) mis-allocated almost $16B of spending on National Defense to Health. The CBO Budget Statement issued in May subsequently reported that Defense spending was estimated to have grown by $4B during April 2018 vs previous year. If you compare the YTD figures in the MTS issues for March and April, 2018, you can see that actual Defense spending grew $63B. This implies an increase of $23B for April 2018 vs April 2017 (not $4B estimated by the CBO, nor $7B reported in the MTS. If you perform a similar calculation on the growth of actual Health spending in the same period, you can see that it was overstated by $16B ($41B vs $25B). I found this by simply entering the figures from the first page of the MTS issues in an Excel spreadsheet.
This is "growth" riding on borrowed money and borrowed time. There will be nowhere to hide when this bubble burts.
7
Consumers spending on their sugar high instead of saving -Deficits sucking real spending needs dry - Corporations buying back stock and investing nada - BUT even:
If real growth with long term fiscal responsibility could be directly attributable to the orange garbage pit -I would vote for any normal ten year old rather than watch this grifter moron crap on everything that made America the hard earned experiment in humanism and democracy that it was.
5
It's actually quite startling that with deficit spending, and a massive injection of more money into the economy that it isn't doing better.
INVESTORS:
The article does well to mention - investors are savvy and priced this in already; they're now looking forward and seem to see fear. It's interesting to point this out though
JOBS:
Last 19th month job growth 3.6M new jobs - Trumps Economy
Previous 19th month job growth 3.8M new jobs - Obama
*19 months is the only only offical BLS numbers since 1/2017
STOCK MARKET:
Equally DJIA growth since Tump ~ 15%. Equal time back for Obama ~18% (S&P 500 is 16% & 8% respectively).
INFLECTION POINTS:
Look the economy is strong (indeed stronger but not substantially stronger than '15 & '16) - but the inflection point is not Jan 2017, but rather right around 2013; and what we're seeing now is credit card spending.
3
I don't get it. The headline right next to this story shows the stock market crashing. Anyone with an IRA and other retirement accounts is in deep trouble. Yet "the economy" is doing well, Republicans will point out.
2
...and who are the real beneficiaries of all this "growth"? Not the 99%, and not the people who have jobs but don't earn enough to house and feed their families and provide health insurance for them.
4
I'm here in Glendale/Phoenix/Scottsdale, metro valley of Phoenix, and this economy feels/looks so shallow. We have so many empty store fronts/pay day loans, store front churches. We have so many people living pay check to pay check. The tax cuts to the wealthiest is such a gross mismanagement of taxpayers money. I want a government that is investing in infrastructure, in safety nets, healthcare, and when we do have a surplus (Clinton) think of having a rainy day fund (Gore). Republicans have been advertised as the party that knows how to manage money. However, if you look at history, we find Republicans governing US into recessions and income inequality gap widens. I am tired of a few old white men allowing Plutocracy into government.
13
@Bernadette Bolognini ... Well, actually it's a diverse cross section of races and genders; i.e. high level tech executives and investors; that allowed plutocracy into government. Checkout the demographics of Facebook, Google, Apple, Amazon, etc. The 1% is quite well represented by a demographical cross section. The problem is socioeconomic inequality for the rest of us caused by the dynamics of a globalized technological economy.
2
Imagine if there were no recent tax cut and no tariffs. It's a good bet economic growth would be exactly the same.
5
They hit the gas on corporate giveaways,that growth is the money leaving our pockets.
2
Since the economy has been playing well politically, Obama reminded us that he started it. That tells me the strength may be real. If the current sell off is not indicating a downturn, he will continue to seek credit. I wonder who will print the article of him distancing himself if this turns out to be a flash in the pan.
Consumer spending went up because of inflation increasing the prices on everything.
2
Why are the years in the axis of the GDP graph not aligned with quarters? Looks like a mistake and makes it seem like 3Q18 is 2Q...
@Adam; The year number is intended to be aligned with Q1. The years 17 and 18 are shifted slightly to the right and fall between Q1 and Q2.
We all know that the economic growth is Obama's fault.
15
"So how come my salary hasn't increased?"-
America
10
@stu freeman Because employers who cover 100% employee + 70% of dependents are paying about $2K / mo per employee.
It's the health care costs.
3
@DickeyFuller: This is the wealthiest country in the world and those who own 80% of that wealth can well afford to cover the health needs of their employees. Otherwise, let the government do it (as is the case everywhere else in the industrialized world) with the bulk of those expenses paid via taxation of the affluent. No need to worry about them: the rich will remain rich even after this (eventually) transpires.
1
@DickeyFuller -which they get to deduct
1
Why do I doubt the data under an administration that has planted political stooges in every department?
4
Who can complain about full employment and a growing economy even when wages are stagnant and large companies go bankrupt,and deficits soar and oil prices head north and the stock market is suffering a seizure offering roulette type investing opportunities throughout the day?
4
@Kirk
Check out this New Yorker cartoon by Tom Toro at
https://antinuclear.net/2012/11/26/climate-change-denial-lobbying-in-for...
Kind of says it all.
Caption: Yes, the planet got destroyed, but for a beautiful moment in time we created a lot of value for shareholders.
All the drawing needs is a stretch of dry ocean in the background to symbolize the barrenness created by the yawning chasm of income inequality in individual lives and the economy as a whole.
In any case, the week's volatility suggests the "beautiful moment" is passing.
6
Since 1947, annual GDP has been 3.22%. So, where does a 3.5% GDP rank especially when we consider that unemployment is at a 50 year low, our current annual fiscal deficit (stimulative) is running a shade less than $800 bn and longterm interest rates are still incredibly low with good access to credit?
1
Everyone who knows anything about the economy recognizes that it can only grow safely at a modest rate. Faster growth causes problems down the road.
The 1970 grew rapidly, causing the poor economy thru much of the 1980s. Bush Jr era deregulation and speeding up the growth in the early 2000s caused 2008. Numerous other ups were followed by downs as the economy corrected.
Trump doesn't understand this of course, only people who actually check facts and learn from history, of which he is not one. He lives in a fantasy world where everything that goes well is his doing and anything that goes wrong is someone else's fault. His view of long-term thinking is tomorrow's tweet or the next news cycle. He thinks the economy (which was improving for 4-5 years before he took office) only started improving once he was sworn in.
Reagan didn't get it, Bush Jr didn't get it, and they're a whole lot smarter than Trump.
Look for a rocky 2019, which will all be tweeted as the Dem's fault, somehow. "Believe me, believe me!"
3
Good headlines for the Republicans but otherwise nothing but cotton candy. Consumer spending by people using small income increases or thank you Trump one time bonuses is not releasing untapped demand. There is not much untapped demand to find. That’s why inventories are rising and capital investment in productive capacity is not.
Trump has led this country into never-never land and reality is going to treat us unmercifully. All those businesses and politicians who made no serious effort to help the recovery over eight years either to avoid risks or to hurt Democrats in elections are stuck following the same habits. There are no safe ways to address the problems that are brewing. Meanwhile, Trump and his supporters lie like rugs.
4
Always entertaining to read "the sky is falling" comments from the left-leaning readers, whenever positive economic news is published.
7
Well, we operate under handicaps. We think about stuff, and we actually read the article.
7
I am sure Trump nation is running around, saying "See, Donny is gonna get me that good paying job, gonna be doing real good soon", will run up the credit cards (data suggests the consumer spending spree is based, not on income, but on a surge in debt buying). Of course, the fact that incomes have not gone up, despite the supposed tight job market, doesn't dawn on Trump's wonderful working class white fanatics, and nor does the fact that the 3.5% growth is as of the third quarter, and could very well when the final numbers are reported next year, be not even 3, if the 4th quarter tanks or they 'adjust' the figures.
More importantly, almost every financial writer and expert, outside Kudlow (who is a bloody joke, was a loudmouth jerk on CNBC who said the 2008 recession was 'a figment of people's imagination' and 'was no big deal' and "would blow over' and afterward said the cause was Fannie Mae and Freddie Mac forced to give mortgages to poor people), is saying they expect growth next year to return to the 2% it was doing when Obama left office...but one thing with Trump nation, never confuse them with facts, doesn't matter, this shows how smart they were to vote for him.
2
Modern economics employs methodologies, models, and metrics that are too distant from realistic human experience to reliably accomplish the goals they are being utilized to accomplish. Gross domestic product, the unemployment rate, and “the rational man,” are three examples of questionably reliable traditional standards economists use to practice their social science. These standards cannot possibly tell us what Americans are going through in this draconian low-wage economy. The only way to do that is to survey millions of Americans in all of the social classes, especially the neglected middle and lower classes, and ask hard questions about their pay, living expenses, and savings. If you do that, you will conclude that this economy is strong for members of the investor-class but weak for many in the working classes.
1
Lets do some math. The GOP borrows 1.5 trillion dollars to stimulate a 19 trillion dollar economy. That mean they borrowed 8 percent to make it grow 3.5 percent.
Can we get our missing money back?
14
@A Few Thoughts
You should start with Obama's $800 billion stimulus that promised millions of shovel-ready jobs. Years later, Obama admitted that there was no such thing as shovel-ready jobs. Did we ever get our money back for that one?
2
@Tony We avoided a 2nd Great Depression.
So, yeah.
1
@Tony. You better believe you got your money’s worth. If you hadn’t, we’d all be looking at the Great Depression II. Just because you didn’t become a millionaire doesn’t mean that the economy went into the toilet for ten years. What would Trump have to brag about if Obama hadn’t saved it?
Quite revealing on the concerning lack (since 1st qtr) of business equipment spend, then residential spend.
Major RE stat (residential) is nationally home sales went down 5.5% YOY/Sept. and renovations so far continue to go up, though with waning RE residential equity across a disparate (national) market, this could portend weaker (2.8% to max 3% GDP) 4th qtr growth.
Also, lets not forget that the PCE index is revealing...and that inflation is about 2.8% with the facade of avg. wage "growth" YOY up about 2.4%....thereby giving VERY LITTLE wiggle room for discretionary spend since this "gap" is eaten up with increasing costs of volatile gas/food...thus, the record level of personal loans with credit card spigot loosening..albeit with higher interest/penalty rates.
The underlying froth will likely become apparent no later then 1st qtr with anemic consumer spend, weakened wage growth, higher oil/gas prices (WTI) and more layoffs. Also, the jump in (again) frontloading inventories isn't sustainable.
I think the "hit" on Chinese retaliation via tariffs will become noticeable by end of 1st qtr 2019. The percentage is too small to make a difference till then, regarding product categories.
Lastly, with 4% "increase" in consumer spend and 2% on inventories, that is HUGE, and would really like to see the composite of our consumer spend with this "increase"...PLUS current savings rate...?? 2.8% and what was is YOY?
However, the personal economies of the middle class have not grown 3.5 %, but in fact, are lagging behind, with decreasing purchasing power and miniscule raises. That is the real news.
12
@et.al.nyc Give the economic growth time to trickle down to middle income salaries. This stuff doesn't happen over a period of months. It takes a few years. The main thing is that for the first time in over a decade the economy is showing material growth on a sustained basis. This is not a fluke.
1
@Aleister Sure Aleister, just a fluke for the waning middle class which has now ceased to serve as our backbone with national economic satisfaction across all demos. Your version of "fluke" is myopic and in dire need to see the Main street version...without rose colored glasses.
1
Did you actually just use the phrase “trickle down,” without irony? Seriously? Wage growth has gone basically nowhere in the 40 years we’ve been waiting for that stuff to work! Well, it does for folks at the top I suppose.
6
The economic recovery has been going on for nine years at a consistent unrelenting determined pace since the catastrophic Bush recession. Yet in this ninth year of the recovery trump asserts he inherited "a mess" and incredibly claims ownership for the whole nine years of recovery, including the low unemployment rate. In truth he's been blithely riding the economic recovery success coattails of his predecessor.
20
The economic report is already yesterday's news. The fear of the end of the Trump boom is strong. Especially knowing that Trump and the Republicans are going to call for cuts in middle class and poor programs to keep the debt from exploding as they continue to ride tax cuts and defense hikes.
11
Republicans can claim they are responsible for the economy and run on it. So what.
They campaigned for years to repeal the ACA and now they are claiming they didn't.
They campaigned on fiscal responsibility but they passed a tax cut for the wealthy which will increase the national deficit at least $1 trillion.
They have aided and abetted Trumps corruption rather than performing their governmental oversight function.
They have denied climate change so long that the dire predictions are now right around the corner.
They have attacked voting rights from the county level to the federal level.
There is much more to consider when choosing who governs than who is responsible for a good economy.
7
I'm not getting a raise, so this means nothing to me. Also, my retirement account is flat for 2018.
Someone else is getting all the goodies. I'm left out.
As far as I'm concerned, the Trump economy is a depression. I'm voting straight blue all the way.
45
@Concerned Citizen, what a loser. So your personal problems are due to politics?
With thinking like this, maybe you should get used to not getting a raise. I'm finding it hard to believe such defeatist and loser behavior isn't spilling over into your work persona.
Get help. Raises will follow. Voting blue - even the blue wave comes - won't lift you at all, and you're likely be right back in misery with thinking like this.
3
The Dow fell 600 points and wiped out all 2018 gains yesterday.
The Trump-GOP tax-cut strychnine and Tariff-Trade-War-Tourette Syndrome is starting to work.
"Take two tax cuts, a few trade wars and a minimum wage job and call me from the morgue, America !"
The GOP Doctor is in.
November 6 2018
Throw the Greed Over People party out of elected office.
35
What stock market? There is no stock market. There never was a stock market. Trump never bragged about the stock market. He couldn’t have, because there never is, and never was, no stock market.
Ever.
2
I'm reminded of a recent article about some men at a golf course touting the economy and how great their investments were doing under Trump. Well a 3.5% GDP sounds great. So those Trumpetiers must be jumping up and down with joy.
Doubt that, some were retirees and IRA's are their lifeblood, and the stock market has wiped out all the gains this year. And today is just another so, so horrible day for the markets. And there's no end in sight.
They might want to rethink who they're backing.
12
The GOP will act like they created all Economic growth since the recession with a simple 1 million dollar loan from Hannibal Hamlin. Give us a break. The GOP falseconomics will never Trump the hate-stumping fear mongering ignorance on the GOP campaign trail. 1200% increase in pipe bombs in 4Q. Vote true, Vote blue, Vote for new.
2
Reality check 400000 people retire from jobs pay living wage each month. Replaced with 200000 tempory jobs dont pay health care of living wage . Job market is continueing to shrink as jobs being exported to comunist coutrys who have zero human rights. Just thought reality.
4
...but the market is tanking and people just aren't FEELING any good effects. Farmers, factory workers, service people - they aren't getting raises - nothing for them to be happy about.
17
3.5% growth of GDP, fantastic! How could it be done? Nobody knows. Sure, the federal government could borrow 3.5% and spend it locally, that would do the trick. Oh wait, dat borrowing was 4.7% of GDP for the FY. Ex borrowing the economy is going at -1.2%....
2
What happened the last couple times the GOP overcooked the economy and gave huge tax cuts to the wealthiest while driving up the deficit with military spending? What was that President Bush said, "Fool me once, shame on you. Fool me twice, I am slow. Fool me three times, I am an idiot."
15
As designed and just in time to fool enough of the short-sighted and shallow thinkers at midterm election time.
4
Nothing like a sugar high, eh? That is until the sugar either runs out or turns toxic...
4
@John Figliozzi That addictive Sweet and Low sugar has escalated to the more potent cocaine "high" mindset...and for many, their endorphins are running amok!
I think the shallow "herd" mentality that seems to typify the nation's general mindset (though not every mind!) across our convoluted political media landscape is veering toward the abyss in "rational" thinking...we can't afford to live on the "high" with $21 T in debt and increasing interest rates though '19, record level personal loans (Jan/2018 research) and increasing high credit card defaults/balances that will encroach on affluent on down consumer spend by next quarte(march/2018 stat) they better hope China doesn't cash out with bankrolling our massive debt...it would further degrade their economy, but...they're a frugal mass market demo/buyer...and can withstand the domestic pullback in spending pain, in my opinion.
Besides the people who legitimately cannot find work and the people who have given up looking for work; and the people who have managed to wangle their way onto to the rolls of the disabled but who are actually able to work; and the people in this country who are making their living as criminals who should probably be counted as unemployed; there are also massive numbers of people in this country who "work" at fake jobs
that are not really jobs.
Government jobs are frequently characterized this way, but the problem reaches far into the private sector as well. Occasionally one hears of people having fake jobs who "work" from home without really working or simply get paid for not working in lieu of providing other services for their bosses.
But most fake jobs are in a different category altogether and consist of things like making coffee, drinking coffee, going to useless meetings, going to lunch, writing reports and emails that nobody ever reads or -- in the case of many women -- simply showing up for work and being decorative.
As far as I know, few, if any, economists or sociologists are studying this matter seriously. If they did, I believe the nation would quickly learn that the true unemployment rate in this country is much higher than 3.7% and may actually be 25% or greater.
I don't know what the country would actually do with this information if it had it, but generally speaking I believe it is better to know that your house is on fire than not to know.
6
@A. Stanton
I think you are confusing 'no show' jobs with fake jobs..fake jobs are the jobs that count as jobs (because the people no longer collect unemployment insurance), things like temp jobs, contract jobs, part time jobs, none with benefits, or jobs in low paying service jobs like home health aids, retail, etc. Instead of calling it fake jobs, call it underemployment, which no one measures, including the media. One thing I don't understand is when they show the unemployment rate and job creation, the idiots here at the Times and elsewhere don't publish an analysis of what those jobs are; 200,000 jobs created at 8 or 10 bucks an hour, no benefits, is not helping the middle class, it is expanding the ranks of the working poor.
1
Didn’t somebody named Krugman say growth higher than 1.9% wasn’t possible?
7
Not without massive overspending or some new sort of ridiculously cheap source of energy. The economy is temporarily juiced, but next year's prohected growth is not good, especially considering the deficit spending that engendered it
5
@Larry Thiel
What Krugman said was that growth above 1.9% based on ordinary economics would not work. The GOP tax bill injected a huge amount of money into an economy already moving along, but the problem is it is like an out of shape person drinking sugar water and running, for the first 10 minutes they will feel like an elite runner, but then will be out of gas, as opposed to someone who got in shape and trained and will do better and better. A lot of this growth is based on consumer spending, the problem is take a look at the debt figures, people are running up debt assuming they can pay for it.....where have we seen this before?
6
@Larry Thiel Now how does stating complete falsehoods do you any good? Is that really the life you want to live?
Krugman never stated that US growth could not possibly be greater than 1.9% in 2018. While I haven't read everything of his, he simply would not have said that.
Enjoy your sugar high -- might as well get something out of it.
2
Doesn't the recent 2,8% COLA increase suggest inflation takes some of the gleam off that 3.5% number?
2
If you’d read further you’d actaully have heard this morning that inflation ticked down, not up.
3
This number is the real rate (adjusted for inflation), so no. Nominal GDP was higher
3
Except this article says zip about inflation, doesn’t give a GDP figure adjusted for inflation, and does warn about what kind of growth this is.
The figure’s good, okay? But at least half of it seems to be based on restocking shelves, or on government spending, or on a big hose of cash sprayed at wealthy people via a big honking tax cut. And though the article does not mention it, a zooming Federal deficit and debt.
Wait...I thought you guys opposed some of that stuff.
1
Again, still waiting for my raise....
14
@Calleen Same here. At least 5 years, no raise. My company loves me. But they aren't giving raises.
1
This is literally the Last Hurrah for the U.S. economy, and for investors who have ridden to the top on Trump fumes. November 6th will provide the catalyst that drives the U.S. over the cliff. GDP growth has been supported by a safety net of $5 trillion of derivatives that should have been banned post-2008. We are today in a situation identical to 2007.
Get ready for "Obama's to blame."
9
Yes, the economy is strong. But, the real issue is unchanged: the benefits of this strong economy are going disproportionately to the 1% and they are doing really well: their wealth is up from stock buy backs by companies and they are buying yachts and adding to their wealth.
The everyday American is seeing minimal wage and salary increases that are more than offset by higher inflation, gas prices, and healthcare costs after the GOP did everything in their power to gut Obamacare (over many years, using the power of the financial purse available to GOP Congress).
Reporting an average like growth rate of the economy is as meaningless as saying the Average tax cut for Americans was $2,000 (for example) when 90% of Americans only got $ 200 and 10% got $20,000 each.
Sure, GDP growth is an indicator of the economy doing well. A metric for companies and investors to consider before making investments.
But, it’s a terrible metric for any political argument of how well the people are doing under a government’s policies: What does growth in inventories mean in terms of welfare of the average American???
25
We need to stop measuring the economy by how well rich people are doing. Life for the vast majority of Americans were better when the Dow was at 800. College and healthcare were affordable, good jobs were available. Today Wall Street bankers and the inheritors of the wealth are doing great. Not so much for the 99% would suffer from stagnant wages for the last 18 years.
46
@RMB The Zimbabwe Stock Market was at record levels fir years - but then they were issuing 100 trillion $Z banknotes (whose value quickly went to zero.......
Perhaps all those record levels are simply a reflection of unacknowledged inflation.
Doing genealogy work, looking at the 1940 census is quite informative) They collected a huge amount of data. Most people earned less that $1000 a year.
In my own family, a house my grandparents paid $12,000 for in 1948 was bought by my parents for $29,000 in 1969 and sold for over $500,000 in 2005. Nothing special.
A new car that sold for $3500 when I got out of college in the 70's goes for $35,000 now. One year of college for my kids costs more than my whole education.
My top of class engineering starting salary buys you a receptionist today though 'good' starting college salaries haven't kept up with rising costs and kids today have student loans far beyond what we could envision.
3.5%! That's awesome. Please tell me that will be reflected in my paycheck enough to catch up to my increases in rent, medical insurance and co-pays, not to mention food.
57
That was before his majesty started to impose his tariffs and then increase the number of tariffs.
So fat chance for the next quarter.
10