U.S. Economy Grew Healthy 3.2% In First Quarter

Discussion in 'Politics, Religion, Social Issues' started by ucfgrad93, Apr 26, 2019.

  1. ucfgrad93 macrumors P6

    ucfgrad93

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  2. pshufd macrumors 6502a

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  3. chown33 macrumors 604

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    I keep seeing the same mistake repeated widely, in headlines, etc.

    The economy (or GDP, or whatever) did NOT "grow 3.2% in the first quarter".

    Instead, it grew at an annualized rate of 3.2% in the first quarter. It says that in the first sentence of the quoted text. That is, if the growth in the first quarter were to continue for 3 more quarters, for a total of 4 quarters or 1 year, then the annual growth would be 3.2%. Short version: 3.2% for a year, not 3.2% for a quarter.

    An actual rate of 3.2% in a quarter would yield about 12.9% growth for a year, using the compounding calculation (exponentiation). It would be 12.8% using the simple calculation (3.2% * 4).


    It's even wrong in the BEA's graph title: "Percent change from preceding quarter":
    https://www.bea.gov/news/2019/gross-domestic-product-1st-quarter-2019-advance-estimate

    The text gets it right, but the graph title is simply wrong: There is not a 3.2% change from the preceding quarter.
     
  4. pshufd macrumors 6502a

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    I don't think that anyone thinks that the economy is growing by 12%. It's just the way it's spoken about.
     
  5. linuxcooldude macrumors 68020

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    If we can sustain it is the question. But great news all around!
     
  6. ucfgrad93 thread starter macrumors P6

    ucfgrad93

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    If you don’t like the thread title, blame USAToday.
     
  7. pshufd macrumors 6502a

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    It would be quite difficult as the inventory builds pulled in business from Q2 and Q3.
    --- Post Merged, Apr 26, 2019 ---
    WSJ Title:
    U.S. Economy Grew at 3.2% Rate in First Quarter
     
  8. Chew Toy McCoy macrumors regular

    Chew Toy McCoy

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    The economy will tank within a year. The bulk of it will have little to do with Trump. We largely did nothing to the banks or Wall St for the last recession they caused. So they are just right back at it again. Toss in growing personal debt and stagnant wages. Should be a doozey.
     
  9. chown33 macrumors 604

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    I do. It's in the 1st sentence of my 1st post.

    I also blame all the others who wrote or copied erroneous headlines.

    I even blame the BEA who posted the original statement, and grossly mislabeled their own graph.

    Innumeracy is rampant. I'd say it's the biggest "fake news" of all, but that would be innumerate.
     
  10. BeeGood macrumors 68000

    BeeGood

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    Weren’t people saying this last year?

    And in 2016?

    The doomsday crowd has predicted 20 of the last 3 recessions.
     
  11. Chew Toy McCoy macrumors regular

    Chew Toy McCoy

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    #11
    If we don't have a recession in 2020 or sooner you can call me on it.
     
  12. pshufd macrumors 6502a

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    It's said every year. And there are good reasons to say it. It's just that it's ...... THE FUTURE!
    --- Post Merged, Apr 26, 2019 ---
    The banks are getting disintermediated by FinTech. So technology has done to the banks what legislators hasn't.

    Household debt to gdp was about 95% and has fallen steadily to 76.4% recently.

    https://forums.macrumors.com/thread...y-3-2-in-first-quarter.2179313/#post-27316762

    Household Debt to Disposable Income - it is high but it has fallen quite a bit. A lot of people learned something from The Great Recession.

    [​IMG]

    [​IMG]
    --- Post Merged, Apr 26, 2019 ---
    Look at 1.3% growth in Q1 real private demand, economists say
    Apr. 26, 2019 1:48 PM ET|About: Vanguard Extended Duration ... (EDV)|By: Liz Kiesche, SA News Editor

    Looking deeper into the stronger-than-expected Q1 GDP number, economists are seeing underlying growth somewhat less robust.


    Increased inventory accumulation of $128.4B and the narrowing trade deficit accounted for the drove the 3.2% top-line growth, says Joseph Brusuelas of RSM.


    Stripping those two factors out, he sees a long-term trend growth rate of 1.8%.


    Robert Frick, of Navy Federal Credit Union, figures GDP is rising at 1.3% based on final sales to private domestic purchasers.


    The Fed will be looking past the top-line number, Brusuelas says, who sees no rate hikes or cuts until after the 2020 election.


    Rates traders, though, peg a rate cut by the end of January 2020 at almost 72%, according to Bloomberg.


    Treasury yields are falling, with the 2-year Treasury yield down 6 basis points to 2.282% and the 10-year Treasury yield down almost 4 bps to 2.499%.


    https://seekingalpha.com/news/3455027-look-1_3-percent-growth-q1-real-private-demand-economists-say

    If growth were really 3.2% and this was expected to continue, then Treasury yields would be up today. Instead, they are down. I own SHY, EDV and TLT - they are all Treasury instruments that go up when the economy is slowing down. So I put my money where my mouth is.
     
  13. LordVic macrumors 603

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    #13
    GDP growth might be indicative of the overall totals of the economic product.

    it does NOT however give any indication of breakdown nor overall health.

    It's good that it's maintaining the expected numbers. But who has the money, where's it's being used and spent doesn't always lead directly to future growth.
     
  14. pshufd macrumors 6502a

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    #14
    The details are readily available. But it can be a fair amount of work digging into them.

    Here's a different view from The Daily Shot:

    [​IMG]
     
  15. BeeGood macrumors 68000

    BeeGood

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    Good reasons to say that we’re heading for a recession every year?

    Based on factors that are pretty much true all the time?
     
  16. pshufd macrumors 6502a

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    Yup. John Mauldin coined the term, the Middle-Through Economy back around 2004-2006 and we've kind of done that (ignoring the crash).
     
  17. BeeGood macrumors 68000

    BeeGood

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    I mean...we haven’t been in a recession every year since 2004. We’re not in a recession more years than we are in a recession.

    I’m not seeing how predicting a recession every year is even logical...you’d be wrong more often than you’re right. How is that even helpful? It’s like saying the world is going to end every year because countries have nuclear weapons.
     
  18. dogslobber macrumors 68040

    dogslobber

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    #18
    The fact the economy is so robust and able to withstand the incompetence of Trump trying to reck it is testament to the seeds sown by Obama/Biden during their eight years of office. Everybody should be thanking Obama and Joe.
     
  19. pshufd macrumors 6502a

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    #19
    A lot of traders want to be right. If you make a call for a crash every year, eventually you will be right. There is always an economic case to be made for a recession - you just have to pick your metrics.
     
  20. Zenithal macrumors 604

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    There is an argument to be made because the global data we have is a small sample at this point for a recorded time period. The economy may never actually crash like it did but other factors will equalize previous gains in some form. In theory, the economy could keep growing but if expenditures grow at the same rate, you're spinning your wheels.
     
  21. linuxcooldude macrumors 68020

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    Cough..BS..Cough
     
  22. vertical smile macrumors 68040

    vertical smile

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    I'm hardly a fan of Trump, and rarely (never?) make any positive comments about him, but at some point you have to give credit where it is due.

    If the economy tanked right now, would that also be the last administration's doing?

    Saying that the economy is doing well in spite of the president at this point is a little disingenuous imo.
     
  23. pshufd macrumors 6502a

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    Economists and the media grudgingly gave Trump credit last year.
     
  24. jkcerda macrumors 6502a

    jkcerda

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  25. ucfgrad93 thread starter macrumors P6

    ucfgrad93

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    What exactly are you doing? Planking?
     

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