patrick.net

These are good numbers but where is the 3.1%?

From the article quoted by OP. "For the year, annual 2018 real GDP increased by 2.9 percent, according to the Bureau of Economic Analysis."

That’ll definitely keep us humming along. No recession in sight yet! Much to the dismay of the coastal elites, TDS-suffering Leftists, and general cretins of the Marxist Movement.

Wasn’t it one of those guys who said we were already in some sort of recession with lots of fancy graphs to “prove” it?
Yah, tell that to the full employment and rising wages.

rdm says

These are good numbers but where is the 3.1%?

It's quoted.

And last quarter was substantially better than scholar for dollar retards economist's consensus.

Here is the Guardian, with a perfect TDS headline, not relating that last quarter beat the 2.2% consensus, coming in at 2.6%, until the article begins.

US economy slows as growth dips to 2.6% in Q4 - business live
https://www.theguardian.com/business/live/2019/feb/28/chinese-factory-slowdown-trade-war-us-gdp-growth-business-live

Quigley says

That’ll definitely keep us humming along. No recession in sight yet!

This GDP # is looking in the mirror at the past. It was due to tax cut. Now the impulse will reverse this year and next, at the same time rates are going up.
We are definitively at the end of the cycle.

The simple fact is that unemployment is low enough that we will create inflation and therefore the Fed will kill the cycle.

So recession is totally in sight: 1-2 yr max.

Plus count on the establishment to time it just before the 2020 election.

Obama averaged only about 1.5% annual growth. He did worse than Carter :-)

I think Trump needs at least 4% annual growth per year to lower the USA debt to GDP ratio.

Heraclitusstudent says

The simple fact is that unemployment is low enough that we will create inflation and therefore the Fed will kill the cycle.

The Fed has to be stopped. A little inflation - say 4-5%/year, has wonderful wealth building effects for most Americans, whose #1 obligation is a fixed mortgage payment. Not good for banks, though.

And yeah, Trump needs to smash the "Independent (Unaccountable)" Federal Reserve if they become hawks, and embarrass the Dems if they don't go along.

MisterLearnToCode says

US economy slows as growth dips to 2.6% in Q4 - business live
https://www.theguardian.com/business/live/2019/feb/28/chinese-factory-slowdown-trade-war-us-gdp-growth-business-live

What happened in Q4?

Moonbat Democrats took over the House of Representatives.

Same correlation with the downturn that started in 2006 when the Democrats won the House and Senate.

AD says

Thank you for this chart. So Obama was the weakest Post-WW2. Before anybody whinges about 2009-2011, I note that Reagan had a rough patch for his first few years.

AD says

I think Trump needs at least 4% annual growth per year to lower the USA debt to GDP ratio.

Yeah is gonna pump up growth by taking debt and that's gonna lower the USA debt to GDP ratio.
One needs to follow the plot here.

Heraclitusstudent says

Yeah is gonna pump up growth by taking debt and that's gonna lower the USA debt to GDP ratio.

Or, use the tariff to increase the tax base which would both increase the GDP and reduce the debt without additional taxation.

Chinese factories don't pay property or corporate taxes, their employees don't pay income taxes, and they don't create secondary industry demand the way domestic industry does.

If a Chinese factory expands, they contract with a Chinese Janitorial Service and Chinese Trucking Company and Chinese Logistics Company, not an American one. And two Chinese Restaurants open nearby; it doesn't create Mac's Diner II or start Joey's Pizza in Saginaw.

We could return to the virtuous cycle where increased consumer demand actually fires domestic industrial demand.

MisterLearnToCode says

So Obama was the weakest Post-WW2

Slow growth is also why Obama reduced the deficit from the initial crisis response and probably why the business cycle is unusually long.

High growth in this case is not higher productivity but just more dissaving at the national level, meaning more end demand in the US fed by debts and answered by more imports.

MisterLearnToCode says

Or, use the tariff to increase the tax base which would both increase the GDP and reduce the debt without additional taxation.

A tariff is a tax!
You could add a value added tax at US level, and cut the payroll taxes. That would do the same, except everyone would recognize it as a tax.

MisterLearnToCode says

The Fed has to be stopped. A little inflation - say 4-5%/year, has wonderful wealth building effects for most Americans, whose #1 obligation is a fixed mortgage payment. Not good for banks, though.

The Fed will just wait for a bit more signs of inflation and resume raising rates.
The initial claims chart at a multi decade low claims eloquently that we are at the end of this cycle.

Heraclitusstudent says

A tariff is a tax!

Yes, it is. A tax on foreign enterprises seeking entrance to the greatest consumer market on the planet.

It's stupid to privilege foreign business over domestic ones unless the discrepancy in price/quality is so enormous, which really isn't the case with the vast majority of consumer, industrial, and scientific goods.

MisterLearnToCode says

A little inflation - say 4-5%/year, has wonderful wealth building effects for most Americans, whose #1 obligation is a fixed mortgage payment.

That only helps the homeowners who already have fixed mortgages before the inflation takes place. People looking to finance or refinance during the period of 5% inflation (and 5% expected future inflation) will face high mortgage interest rates that completely defeat the "benefits" of inflation.

Also, American's with modest savings and/or modest financial sophistication can't always put those savings in investments that are protected from inflation. Those Americans will be robbed by the inflation.

Also, the $250k ($500k married) deduction of capital gains on house appreciation isn't indexed to inflation. If you buy a $400k home that merely keeps up in value with the inflation and sell it after 30 years of 5% inflation, your home will sell for $1.7 million. You'll have a capital gain of $1.3 million and so pay capital gains on $1.05 million ($800k married). That's a pretty large tax bill for you're paying on a non-existent real gain.

SunnyvaleCA says

That only helps the homeowners who already have fixed mortgages before the inflation takes place. People looking to finance or refinance during the period of 5% inflation (and 5% expected future inflation) will face high mortgage interest rates that completely defeat the "benefits" of inflation.

And correspondingly low total home prices, since high rates kick prices down, and then they refi to a lower rate later.

Heraclitusstudent says

This GDP # is looking in the mirror at the past.

Really?

What happened to Obama his last TWO years? You know, Recovery V7.0 and 8.0



socal2 says

What happened in Q4?

Moonbat Democrats took over the House of Representatives.

Same correlation with the downturn that started in 2006 when the Democrats won the House and Senate.

Exactly right. I was just coming here to post that.

By the Fall last year, it was clear the Moonbats would take back the House. This will be a repeat of what happened in 2006, when the Dems crashed the economy after taking back the House.

History will repeat itself.

OccasionalCortex says

The media is portraying it coming in at 2.9%, so they can claim Trump didn't deliver.

Natch

"#Orangemanbad Regime lies! Our calculations have GDP of 2.9% which is not 3%. Lying Orangemanbad! Vote Bloomberg!"

US GDP Falls For Third Straight Quarter, Stokes Recession Fears

The drop in U.S. GDP to an annualized rate of 2.6 percent in the fourth quarter of 2018 confirms the deceleration of its economy and raises the risk of a recession by 2021.

GDP numbers released by the U.S. Department of Commerce today also show U.S. economic growth falling for the third straight quarter -- from 4.2 percent in the second to 3.4 percent in the third to 2.6 percent in the fourth. A continuation of this trend in the first quarter of this year is now even likelier.

Analysts blamed the slowdown in the global economy for the weaker U.S. economic growth. The good news is the 2.6 percent Q4 GDP is better than the 2.3 percent growth predicted by a panel of economists in a Reuters poll. Big banks were even more pessimistic about Q4 growth. JPMorgan Chase forecast only a 1.8 percent improvement while Goldman Sachs was even more downbeat with its prediction of a 1.7 percent rise.

The picture for the full-year 2018 remains optimistic, but not as rosy as the picture painted by the Trump administration. Economists estimate the economy grew some 2.9 percent in 2018, which will the best result since 2015, and better than the 2.2 percent growth in 2017.

“This is as good as it gets for the first Trump administration,” noted Joe Brusuelas, chief economist at accounting firm RSM International.

The Trump administration estimates economic growth for the year at 3 percent. During the presidential campaign, Trump boasted he could boost annual economic growth to 4 percent, a goal economists always said was unachievable given the maturity of the U.S. economy.

Economists said the economy fell short of the administration’s annual growth target for 2018 despite the massive $1.5 trillion in tax cuts and the government spending spree. They concur that growth will only slow from here on in.

The fiscal stimulus peaked sometime in the fourth quarter, according to economists. December economic data shows a sharp weakening in exports, retail sales, homebuilding and business spending on equipment weakened sharply. Most manufacturing metrics were weaker in January and February. Motor vehicle demand was also feeble.

“With the tax cut impacts largely done with, it is hard to see how growth can accelerate sharply.” said Joel Naroff, chief economist at Naroff Economic Advisors in Pennsylvania. “We are moving back to a sustainable growth pace that we experienced during most of the Obama years.”

Economic growth in 2018 was the strongest since 2015. It was also better than the 2.2 percent growth in 2017.

The stronger-than-expected Q4 growth reflected solid consumer and business spending despite mounting challenges, including sustained financial market volatility and Trump’s trade war with China.

Some economists expect GDP growth to further slow to 2.2 percent for the full-year 2019.

https://www.ibtimes.com/us-gdp-falls-third-straight-quarter-stokes-recession-fears-2769886

Mr. Magic - forget to finish that spiffy blue line that shows things heading south now ?

How the Republicans moved the goal posts on GDP - A short explainer on why the government publishes two GDP growth numbers

A reader emails to ask why the media reported two different numbers on Thursday to describe how fast the U.S. economy grew in 2018. Some people said it grew 2.9%, while others said 3.1%. Which is right?

The reader notes that Jason Furman, who was President Barack Obama’s top economist, said he thought 3.1% was the better measure of how the economy performed, and not just because it was higher.

I agree, even though I used 2.9% in my column (for reasons I’ll explain later).

AThe reader notes that Jason Furman, who was President Barack Obama’s top economist, said he thought 3.1% was the better measure of how the economy performed, and not just because it was higher.

I agree, even though I used 2.9% in my column (for reasons I’ll explain later).

Jason Furman
✔
@jasonfurman
A solid 2.6% GDP growth rate for Q4 brings the headline annual average growth rate for 2018 to 2.9% (or 3.1% for Q4/Q4 which is a better measure of how the economy actually performed in 2018).
25
10:17 AM - Feb 28, 2019

The reader (OK, former MarketWatch reporter Ruth Mantell) continues: What is Furman talking about when he says the “headline annual average growth rate” and “Q4/Q4”? Why are there two measures of gross domestic product growth? And which one should I use?

The answer: It depends

Here’s my answer: Which one you use depends on what you want to measure — whether you want to look at GDP levels or GDP growth rates.

If you want the level, use annual figures. If you want growth rates, use year-over-year figures.

Annual GDP numbers add up all the economic activity in the year. It’s as if you were setting the odometer back to zero on Jan. 1 and measuring how many miles you drove.

So, for 2018, the economy produced $18.6 trillion (inflation-adjusted) of goods and services (versus $18.1 trillion in 2017). It tells us how much income was received during the year. It tells us how much was produced and sold, how much was exported and imported, how many cars were made, how many houses built, and so on.

You can see this kind of analysis is very good for some things.

But this measurement produces some misleading growth rates, because the annual growth rate of 2.9% compares all the activity throughout 2017 with all the activity in 2018. It tells us as almost as much about 2017 as 2018.


The best way to measure GDP growth rates is to use year-over-year numbers. By this measure, the economy grew 3.1% over the past year, nearly as strong as in the first two quarters of 2015.

If you want meaningful growth rates, it’s better to compare one quarter with the same quarter a year earlier (what Furman calls “Q4/Q4” or what more generally I call “year-over-year”). That way, you are just measuring what happened in the past 12 months.

In this case, BEA measured the annualized GDP level in the fourth quarter of 2017 ($18.2 trillion) against the annualized level in the same quarter of 2018 ($18.8 trillion). It got 3.1% growth.

This calculation measures how much the economy changed between Dec. 31, 2017, and Dec. 31, 2018. What happened in 2017 is irrelevant. Only activity in 2018 is counted.

Usually quite close
These two ways of computing GDP rates produce numbers that are usually quite close, except when the economy experiences large losses or gains. Like in a recession.

Consider 2008: Annual GDP was -0.1%. Year-over-year GDP was -2.8%.

Now let’s do 2009: Annual GDP was -2.5%. Year-over-year GDP was 0.2%.

Which describes the Great Recession better? I think year-over-year does. It puts the worst part of the downturn in 2008 and the beginnings of the recovery in 2009, where they belong.

The annual growth rates, by contrast, bring activity from 2007 into the equation where it’s not wanted.

Furman is correct: The year-over-year number (3.1%) is a better gauge of what happened in the economy during 2018 than the more widely reported annual number of 2.9%.

Apples to apples

Now, why did I use 2.9% in my column? Because I was comparing apples with apples.

The Republicans made a big point about how the economy never grew 3% in any year during Obama’s presidency. It was a wonderful, easy-to-understand symbol of what they depicted as Obama’s economic failures.

The best annual figure under Obama was 2.9% in 2015, and the Trump White House was sure it would beat that this year. It put everything it could into it: lots of jawboning, a big tax cut and a huge increase in government spending.

Unfortunately, the economy fell just short of Trump’s 3% goal post. According to the latest estimates, Trump’s best year just matches Obama’s best.

That’s why the White House switched to the 3.1% year-over-year figure when it touted Trump’s successes in its press release on GDP. The economic difference between 2.9% and 3.1% is trivial, but the political difference is the difference between the Greatest President Ever and the Kenyan Marxist.

Unfortunately for the pro-Trump spin machine, the best year-over-year growth in Obama’s presidency (3.8% from the first quarter of 2014 to the first quarter of 2015) is higher than the best year-over-year growth under Trump (3.1% from the fourth quarter of 2017 to the fourth quarter of 2018).

When the facts aren’t in your favor, change the subject. Or move the goal posts.

https://www.marketwatch.com/story/how-the-republicans-moved-the-goal-post-on-gdp-2019-03-01

MisterLearnToCode says

The Fed has to be stopped. A little inflation - say 4-5%/year, has wonderful wealth building effects for most Americans, whose #1 obligation is a fixed mortgage payment. Not good for banks, though.

Yes! And not only do those in debt (mortgage, etc.) see some relief, those holding investment instruments like stocks or indexes tied to stocks tend to also see the raw dollar value increase to match inflation. Really, mild inflation only hoses debt issuers (usually banks, but...), and banks generally respond with higher interest rates on new debt issued. higher rates in turn slow the amount of leverage in the system, which conveniently slows inflation. So the whole thing is nicely balanced to prevent anything spiraling in any one direction for too long. That is, unless something like inflation comes on too fast and hard, or if the system is monkeyed with too much (by e.g. some central authority like the fed).

Kakistocracy says

The drop in U.S. GDP to an annualized rate of 2.6 percent in the fourth quarter of 2018 confirms the deceleration of its economy and raises the risk of a recession by 2021.

Kakistocracy says

The best way to measure GDP growth rates is to use year-over-year numbers. By this measure, the economy grew 3.1% over the past year, nearly as strong as in the first two quarters of 2015.

Folks... the TDS is getting so extreme, that posters can't even follow along and understand how they contradict themselves in different posts.

So embarrassing for them...

Kakistocracy says

When the facts aren’t in your favor, change the subject. Or move the goal posts.

Or, just make up some more B.S.

The FACTS are that the economy is doing just fine right now. The Federal Reserve has raised rates continuously throughout the Trump presidency in an attempt to SLOW growth. This has had some effect but hasn’t stopped the forward progress. We remain in a growing economy which continues to improve on most perceived metrics.

Kakistocracy says

Unfortunately, the economy fell just short of Trump’s 3% goal post. According to the latest estimates, Trump’s best year just matches Obama’s best.

Assuming this is true, here's the difference:

The economy was always going to bounce back, Obama didn't really get much new growth but rather a return to what it was.

Trump is overseeing an economy that's growing LARGER than it was, not just Recovering Slowly.

Lowest Unemployment since the 1960s. Keeping the Economy moving forward. Massive accomplishment.

More Lousy Data Emerges after Government Shutdown: Construction Spending

Residential Construction Skids, Nonresidential Construction Stagnates. The delay gave markets a break from lousy data.

OK, it looks like GDP growth, released last week for the fourth quarter (+2.6% annualized rate), will be revised lower on March 28, given today’s data on construction spending for December, which had been delayed due to the government shutdown.

Construction spending fell 0.6% in December from November, based on a seasonally adjusted annual rate, released today by the Commerce Department. Compared to December a year earlier, total construction spending inched up only 0.8% (not seasonally adjusted), the lowest growth rate since Oct 2011, coming out of the great recession. For the whole year of 2018, construction spending rose 4.1% (not seasonally adjusted), showing that the downturn came late in the year:



Construction spending peaked in 2005, then declined through the Great Recession and into early 2010, followed by a catch-up building boom with year-over-year growth rates of over 20% for brief periods and over 10% for most of the time between mid-2012 and late 2015.

Construction spending, at nearly $1.3 trillion in 2018, accounted for over 6% of the US economy. It can’t be offshored and has a large secondary impact on the economy, from companies buying construction equipment to workers buying new vehicles and sandwiches. It matters to the US economy.

Private residential construction was the problem. Spending on single-family houses, multi-family apartment buildings, etc., but not public residential construction, fell 3.5% in December compared to December 2017 (not seasonally adjusted), the fourth month in a row of year-over-year declines:



In terms of dollars, private residential construction is forming a peculiar pattern: An epic construction boom during Housing Bubble 1, an epic construction bust during Housing Bust 1, and a construction boom during Housing Bubble 2 that is now losing its grip. In December, private residential construction spending, at $537 billion seasonally adjusted annual rate, while down from December a year earlier, was more than double the range during the 3-year span between 2009 and 2012, but remains below the crazy peak in 2005 (December 2005 $671 billion):



Private non-residential construction – office buildings, warehouses, hospitals, manufacturing facilities, etc., but not including projects for oil-and-gas drilling – rose 3.8% compared to December 2017. But December 2017 is an easy comparison: that month, spending had dropped 3.5% year over year. Compared to December 2016, spending in December 2018 was about flat, stagnating at $454 billion seasonally adjusted annual rate:



Public construction spending – including on the infamous US infrastructure such as highways and water-and-sewer systems – rose 4.2% year-over-year in December (not seasonally adjusted). But in dollar terms, it has not gone anywhere in 20 years, after peaking in March 2009. December’s spending at $301 billion seasonally adjusted annual rate was back where it had first been in March 2008:



This report on December construction spending was another in a series of reports for late last year that had been delayed due to the government shutdown, and that showed, when they were finally released, an economy whose growth was slowing toward the end of the year, with some actual year-over-year declines cropping up, such as in residential construction.

For the markets, the government shutdown, and the accompanying blackout of economic data, was precisely what was needed the most to sustain the blistering rally in January and February. But this data is now trickling out. And it is putting together the uninspiring image of an economy that is growing but at a considerably slower rate than earlier in 2018, and is right back in the range of where it had been in prior years despite the enormous dual stimulus of huge tax cuts and ballooning government spending.

https://wolfstreet.com/2019/03/04/more-lousy-data-emerges-after-government-shutdown-construction-spending/