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First Quarter G.D.P. Contracts 2.9%

progressivedem22
Posts: 1,304
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6/27/2014 10:06:59 AM
Posted: 2 years ago
"The Commerce Department said on Wednesday gross domestic product fell at a 2.9 percent annual rate, the economy's worst performance in five years, instead of the 1.0 percent pace it had reported last month. While the economy's woes have been largely blamed on an unusually cold winter, the magnitude of the revisions suggest other factors at play beyond the weather. Growth has now been revised down by a total of 3.0 percentage points since the government's first estimate was published in April, which had the economy expanding at a 0.1 percent rate."

http://www.cnbc.com...#.

Estimates were around -1.5 to -2 from the original 0.1, but even those figures were disputed by some. Scott Sumner writes:

"Here is the evolution of labor compensation and corporate after-tax profits over the past 9 quarters:

Total labor compensation: $8315.3b. "-> $9049.5b. Up 8.8%

After-tax corporate profits: $1184.6b. "-> $1099.5b. Down 7.2%

So why have workers been doing so much better than corporations in recent years? And why did corporate after-tax profits plunge from $1.3 trillion in 2013 Q4 to $1.1 trillion in 2014 Q1?

I know what you are thinking. "I don"t believe those numbers. Where did you get them?" I got them from the BEA. And I don"t believe them either. And that"s why I don"t believe that nominal GDI fell 1.4% rate in Q1. Because if you look at components of gross domestic income, you get the following:

Compensation plus depreciation (reliable data): Up at a 3.7% rate in Q1.

That"s more than 2/3rds of national income. So basically the unusual (1.4%) plunge in NGDI was a story of plunging corporate profits. I know of no other data confirming that plunge. Stock prices are soaring. Corporations have been reporting very strong earnings. If someone can find non-government data supporting the claim that workers are far outperforming corporations in recent years, I"d love to see the evidence."


http://www.themoneyillusion.com...

A bit of reading, but some very interesting data nevertheless.
progressivedem22
Posts: 1,304
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6/27/2014 12:27:01 PM
Posted: 2 years ago
Just wanted to reorganize this so it's readable.

"The Commerce Department said on Wednesday gross domestic product fell at a 2.9 percent annual rate, the economy's worst performance in five years, instead of the 1.0 percent pace it had reported last month. While the economy's woes have been largely blamed on an unusually cold winter, the magnitude of the revisions suggest other factors at play beyond the weather. Growth has now been revised down by a total of 3.0 percentage points since the government's first estimate was published in April, which had the economy expanding at a 0.1 percent rate.":

http://www.cnbc.com...#.

Estimates were around -1.5 to -2 from the original 0.1, but even those figures were disputed by some. Scott Sumner writes:

"Here is the evolution of labor compensation and corporate after-tax profits over the past 9 quarters:

Total labor compensation: $8315.3b. "-> $9049.5b. Up 8.8%

After-tax corporate profits: $1184.6b. "-> $1099.5b. Down 7.2%

So why have workers been doing so much better than corporations in recent years? And why did corporate after-tax profits plunge from $1.3 trillion in 2013 Q4 to $1.1 trillion in 2014 Q1?

I know what you are thinking. "I don"t believe those numbers. Where did you get them?" I got them from the BEA. And I don"t believe them either. And that"s why I don"t believe that nominal GDI fell 1.4% rate in Q1. Because if you look at components of gross domestic income, you get the following:

Compensation plus depreciation (reliable data): Up at a 3.7% rate in Q1.

That"s more than 2/3rds of national income. So basically the unusual (1.4%) plunge in NGDI was a story of plunging corporate profits. I know of no other data confirming that plunge. Stock prices are soaring. Corporations have been reporting very strong earnings. If someone can find non-government data supporting the claim that workers are far outperforming corporations in recent years, I"d love to see the evidence."



http://www.themoneyillusion.com...

A bit of reading, but some very interesting data nevertheless.
ChosenWolff
Posts: 3,361
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6/27/2014 3:32:18 PM
Posted: 2 years ago
It is all very confusing when the DOC wont give you surefire data. At the beginning of this year, we were supposed to see a nominal growth of 2%, and now the YOY is situated at 2.9%, but numbers are flailing everywhere. If we don't see a 2% growth in the US gross domestic product by the end of the year, we might as well resort to authoritarianism.
How about NO elections?

#onlyonedeb8
ESocialBookworm
Posts: 14,361
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6/29/2014 7:28:34 PM
Posted: 2 years ago
At 6/29/2014 6:21:24 PM, Blade-of-Truth wrote:
At 6/27/2014 10:06:59 AM, progressivedem22 wrote:
"The Commerce Department said on Wednesday gross domestic product fell at a 2.9 percent annual rate, the economy's worst performance in five years, instead of the 1.0 percent pace it had reported last month. While the economy's woes have been largely blamed on an unusually cold winter, the magnitude of the revisions suggest other factors at play beyond the weather. Growth has now been revised down by a total of 3.0 percentage points since the government's first estimate was published in April, which had the economy expanding at a 0.1 percent rate."

http://www.cnbc.com...#.

Estimates were around -1.5 to -2 from the original 0.1, but even those figures were disputed by some. Scott Sumner writes:

"Here is the evolution of labor compensation and corporate after-tax profits over the past 9 quarters:

Total labor compensation: $8315.3b. "-> $9049.5b. Up 8.8%

After-tax corporate profits: $1184.6b. "-> $1099.5b. Down 7.2%

So why have workers been doing so much better than corporations in recent years? And why did corporate after-tax profits plunge from $1.3 trillion in 2013 Q4 to $1.1 trillion in 2014 Q1?

I know what you are thinking. "I don"t believe those numbers. Where did you get them?" I got them from the BEA. And I don"t believe them either. And that"s why I don"t believe that nominal GDI fell 1.4% rate in Q1. Because if you look at components of gross domestic income, you get the following:

Compensation plus depreciation (reliable data): Up at a 3.7% rate in Q1.

That"s more than 2/3rds of national income. So basically the unusual (1.4%) plunge in NGDI was a story of plunging corporate profits. I know of no other data confirming that plunge. Stock prices are soaring. Corporations have been reporting very strong earnings. If someone can find non-government data supporting the claim that workers are far outperforming corporations in recent years, I"d love to see the evidence."


http://www.themoneyillusion.com...


A bit of reading, but some very interesting data nevertheless.

Did you just block me? I just spent 20 minutes writing out a detailed PM in which we could work out our differences but see that I can't send you the message. Would you please allow us the opportunity to discuss the issues in PM? If not, I don't see how we can possibly move forward with you simply blocking me. Are you unwilling to respond like a man?

Maybe you two should just stop. BOTH of you. This has caused too much unnecessary drama.
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Blade-of-Truth
Posts: 5,025
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6/29/2014 7:38:41 PM
Posted: 2 years ago
At 6/29/2014 7:28:34 PM, ESocialBookworm wrote:
At 6/29/2014 6:21:24 PM, Blade-of-Truth wrote:
At 6/27/2014 10:06:59 AM, progressivedem22 wrote:
"The Commerce Department said on Wednesday gross domestic product fell at a 2.9 percent annual rate, the economy's worst performance in five years, instead of the 1.0 percent pace it had reported last month. While the economy's woes have been largely blamed on an unusually cold winter, the magnitude of the revisions suggest other factors at play beyond the weather. Growth has now been revised down by a total of 3.0 percentage points since the government's first estimate was published in April, which had the economy expanding at a 0.1 percent rate."

http://www.cnbc.com...#.

Estimates were around -1.5 to -2 from the original 0.1, but even those figures were disputed by some. Scott Sumner writes:

"Here is the evolution of labor compensation and corporate after-tax profits over the past 9 quarters:

Total labor compensation: $8315.3b. "-> $9049.5b. Up 8.8%

After-tax corporate profits: $1184.6b. "-> $1099.5b. Down 7.2%

So why have workers been doing so much better than corporations in recent years? And why did corporate after-tax profits plunge from $1.3 trillion in 2013 Q4 to $1.1 trillion in 2014 Q1?

I know what you are thinking. "I don"t believe those numbers. Where did you get them?" I got them from the BEA. And I don"t believe them either. And that"s why I don"t believe that nominal GDI fell 1.4% rate in Q1. Because if you look at components of gross domestic income, you get the following:

Compensation plus depreciation (reliable data): Up at a 3.7% rate in Q1.

That"s more than 2/3rds of national income. So basically the unusual (1.4%) plunge in NGDI was a story of plunging corporate profits. I know of no other data confirming that plunge. Stock prices are soaring. Corporations have been reporting very strong earnings. If someone can find non-government data supporting the claim that workers are far outperforming corporations in recent years, I"d love to see the evidence."


http://www.themoneyillusion.com...


A bit of reading, but some very interesting data nevertheless.

Did you just block me? I just spent 20 minutes writing out a detailed PM in which we could work out our differences but see that I can't send you the message. Would you please allow us the opportunity to discuss the issues in PM? If not, I don't see how we can possibly move forward with you simply blocking me. Are you unwilling to respond like a man?

Maybe you two should just stop. BOTH of you. This has caused too much unnecessary drama.

I can't do anything more than wait for his response to my PM. I'm trying to work out the differences in private. That's all I'll say.
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Subutai
Posts: 3,197
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6/29/2014 9:59:52 PM
Posted: 2 years ago
What bothers me most about the latest GDP report is not the magnitude of the decrease, but the magnitude of the revision. Are America's accountants really misplace almost a trillion dollars? And that's not to say that the drop in GDP is not disturbing.
I'm becoming less defined as days go by, fading away, and well you might say, I'm losing focus, kinda drifting into the abstract in terms of how I see myself.
JohnMaynardKeynes
Posts: 1,512
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6/29/2014 10:18:30 PM
Posted: 2 years ago
At 6/29/2014 9:59:52 PM, Subutai wrote:
What bothers me most about the latest GDP report is not the magnitude of the decrease, but the magnitude of the revision. Are America's accountants really misplace almost a trillion dollars? And that's not to say that the drop in GDP is not disturbing.

I'm fully with you on this. A spread of 2.8 percentage points is positively absurd, and even the estimates of around 1.7 -- bearing in mind that average post-crisis growth rates are around 2.2 percent -- is actually astronomical. I was actually expecting a much higher number given the rate and consistency at which the Fed was reducing QE3.

16kadams also brings up a good point: I don't think the weather was the cause. Data from the BEA suggests that a substantial drop in inventory purchases and exports is to blame. Whether the cold weather contributed to the transportation of goods to ports is another thing, but I think the cause was largely exogenous.
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JohnMaynardKeynes
Posts: 1,512
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6/29/2014 10:37:51 PM
Posted: 2 years ago
At 6/29/2014 10:18:30 PM, JohnMaynardKeynes wrote:
At 6/29/2014 9:59:52 PM, Subutai wrote:
What bothers me most about the latest GDP report is not the magnitude of the decrease, but the magnitude of the revision. Are America's accountants really misplace almost a trillion dollars? And that's not to say that the drop in GDP is not disturbing.

I'm fully with you on this. A spread of 2.8 percentage points is positively absurd, and even the estimates of around 1.7 -- bearing in mind that average post-crisis growth rates are around 2.2 percent -- is actually astronomical. I was actually expecting a much higher number given the rate and consistency at which the Fed was reducing QE3.

16kadams also brings up a good point: I don't think the weather was the cause. Data from the BEA suggests that a substantial drop in inventory purchases and exports is to blame. Whether the cold weather contributed to the transportation of goods to ports is another thing, but I think the cause was largely exogenous.

Oops, that's a math train wreck lol. The second spread was 1.2 percentage points.
~JohnMaynardKeynes

"The sight of my succulent backside acts as a sedative for the beholder. It soothes the pain of life and makes all which hurts seem like bliss. I urge all those stressed by ridiculous drama on DDO which will never affect your real life to gaze upon my cheeks for they will make you have an excitement and joy you've never felt before." -- Dr. Dennybug

Founder of the BSH-YYW Fan Club
Founder of the Barkalotti
Stand with Dogs and Economics
sadolite
Posts: 8,837
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6/30/2014 4:05:48 PM
Posted: 2 years ago
If you want to know how the economy is doing, look outside your front door. If you can't quit your job and get another one that pays the same or more in a weeks time, the economy sucks. I consider myself lucky to have my job at the rate it pays. If I quit or got laid off, I would have to start all over again. The job seeker has no leverage, especially those who are long term unemployed and over 50.
It's not your views that divide us, it's what you think my views should be that divides us.

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If liberal democrats would just stop shooting people gun violence would drop by 90%