Economy doing better than projected

[BDBoop]

http://www.nytimes.com/2013/12/21/b...n-new-estimate.html?emc=edit_na_20131220&_r=0

WASHINGTON — The United States economy grew at a surprisingly robust 4.1 percent annual pace in the third quarter, the Commerce Department said on Friday. It was the strongest advance in nearly two years and only the third time the economy had expanded that quickly from one quarter to the next since 2006.

It is the latest evidence that the generally sluggish recovery is gaining strength, though economists noted that the rate of growth over a longer period remained at a trot, not a gallop — a pace of about 2.5 percent a year.

“We continue to believe that underlying growth will remain on a moderate trend,” said Joshua Shapiro, the chief United States economist at MFR, a consulting firm. “The outlook is greatly dependent on the direction of the labor market, and hence the path of wage and salary growth and the ability of consumers to expand spending.”

That is good news, and I am willing to bet that Congress finally doing their job with the budget will also help us gain lost ground.

 

[Old Rocks]

And that news will bring much wailing and gnashing of teeth from the "Conservative" side.

 

[BDBoop]

Oh, they'll just make the usual sour grape comments about how it's seasonal, yada-yada, Obama had nothing to do with it, blah-blah bullshit.

 

[CrusaderFrank]

unsold inventory made up 1/3 of the "growth" which makes perfect sense in an economy where unemployment checks stimulate the economy and bank ATM's stifle growth

 

[Katzndogz]

I wonder what the real figures are?

 

[driveby]

Obama administration enabling is up 7.3%, higher than expected.......

 

[Esmeralda]

And that news will bring much wailing and gnashing of teeth from the "Conservative" side.

What they will do is try to pretend it isn't really happening. If it were a republican administration, they'd do just the opposite. Reality isn't important; partisanship is.

 

[oldfart]

http://www.nytimes.com/2013/12/21/b...n-new-estimate.html?emc=edit_na_20131220&_r=0

WASHINGTON — The United States economy grew at a surprisingly robust 4.1 percent annual pace in the third quarter, the Commerce Department said on Friday. It was the strongest advance in nearly two years and only the third time the economy had expanded that quickly from one quarter to the next since 2006.

It is the latest evidence that the generally sluggish recovery is gaining strength, though economists noted that the rate of growth over a longer period remained at a trot, not a gallop — a pace of about 2.5 percent a year.

“We continue to believe that underlying growth will remain on a moderate trend,” said Joshua Shapiro, the chief United States economist at MFR, a consulting firm. “The outlook is greatly dependent on the direction of the labor market, and hence the path of wage and salary growth and the ability of consumers to expand spending.”

That is good news, and I am willing to bet that Congress finally doing their job with the budget will also help us gain lost ground.

OK, good news is always better than bad news. That said, quarterly growth figures are highly volatile, hence the caveat about the trend being 2.5% a year. There is a reason to believe the spike is temporary; inventory accumulation is high as Frank noted and a change in tax law is loading investment into 2013. These guarantee a return to trend in the first quarter 2014.

The Shapiro quote is a warning. There is scant evidence of job market improvement on a scale that would support higher growth. Nor do I see anything in the budget deal that justifies much cheering. This is the "Three Stooges" theory of macroeconomics; when Moe asks Curly why he is beating his head against the wall, he replies "Because it feels so good when I stop!" Reducing destimulus makes things marginally better, but it's not a return to economic health.

Our economic system is profoundly broken. It has been in trouble for thirty years and depressed for a decade with no end in sight. In 2008 many people were incredulous when I mentioned that some of the best macro models showed no recovery five years out. It turns out they were right. We are just marking time until the next collapse.

It doesn't have to be this way. Robust recovery has always been possible; we could be over this Lesser Depression by now. That however would require a level of political will and intellectual honesty almost completely absent from our "best that money can buy" political system.

Perhaps my grandchildren will do better.

 

[f252863]

As a point of fact the statement "doing better than projected" is meaningless.

Susan's parents projected she would get a "C" in history, she got a B-.

Tom's parents projected that he would get an "A" in history, he got a B+.