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GDP PLUMMETS 2.9%

Discussion in 'Economy' started by ethics, Jun 25, 2014.

  1. ethics

    ethics Pomp-Dumpster Staff Member

    Had to edit this post as I got the numbers wrong. Still, on top of all the good housing news, this is very very bad. 1Q 2014 GDP reading of -2.9% annual rate is worst in five years (since 1q 2009 -5.4%).
     
    Last edited: Jun 25, 2014
  2. Biker

    Biker Administrator Staff Member

    I expect it to get worse. One of the best ways to keep tabs on the pulse of the economy is to watch trucking. And the government is doing it's level best to over regulating trucking. Drivers are leaving in droves as new rules kick in that not only impact the mileage pay received, but also affect when you can drive.

    Freight tonnage was flat in 2013, and estimates for the rest of 2014 don't look much better.
     
  3. ethics

    ethics Pomp-Dumpster Staff Member

    When growth is strong, even some bad weather and an unexpected inventory swing don’t cause a contraction in the economy, or at least not a contraction on the scale reported for the first quarter of 2014. But because the pattern of growth has been roughly in the 2 percent range or a bit below that for years now, the economy is more vulnerable to shocks that leave G.D.P. growth in negative territory.

    http://www.nytimes.com/2014/06/26/u...orse-than-everybody-thought.html?src=twr&_r=2
     
  4. ethics

    ethics Pomp-Dumpster Staff Member

    Good write up on potential reasons

    There is a simple, yet consequential, analogy at work here. An economy that was in the intensive-care unit from 2008 to 2009 required emergency policy interventions that helped the patient heal, and eventually leave the hospital. While the economy has resumed many of its normal functions, its recovery is only tentative. It is, in fact, still healing. It is an economy that can walk, and certainly do so a lot more briskly than its European counterpart (which is still in a hospital ward across the Atlantic). But the U.S. economy cannot run fast and long yet. And it can also be tripped up easily, despite all the experimental medicine that its doctor at the Federal Reserve continues to administer.
     
  5. Copzilla

    Copzilla dangerous animal Staff Member

    I think Obamacare continues to be the albatross. We should be past this by now, by far.
     
  6. ethics

    ethics Pomp-Dumpster Staff Member

    So to be fair, this morning's GDP number for 3rd quarter are fantastic 4%. Revised from last quarter is not -2.9% but a -2.1% as well.

    But with every good news, there's.... dun dun dun... INFLATION!
     
  7. Sierra Mike

    Sierra Mike The Dude Abides Staff Member

    Inflation's going to come. The Fed HAS to raise the prime rates eventually, they can't stay this low.
     
  8. ethics

    ethics Pomp-Dumpster Staff Member

    MS YELLEN! TEAR DOWN THIS WALL!!!
     
  9. Sierra Mike

    Sierra Mike The Dude Abides Staff Member

    It's the cycle of things. The market is healing, albeit slowly, so rates will go up and bond buys will diminish. It's a shame it had to happen, though--now we'll NEVER be able to convince China to halt yuan manipulation, since we've just spend a decade directly managing the economy. :)
     

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