Apparently, 4th qtr 07 GDP growth was down to .6%.
Noteworthy:
"Personal consumption, a proxy for spending by individuals on every-day needs, added nearly 1.4 percentage points to growth. But that was a relatively weak reading for the fourth quarter, which includes the holiday shopping period. Only 2005, when the economy took a hit from Hurricane Katrina, has fourth quarter personal consumption grown at a slower rate in the last five years."
That is a DIRECT RESULT of the constant pounding of the meme about "the bad economy and the coming recession" that's been planted incessantly in the public mind.
Absent that, normal personal consumption and our strong net export numbers would have kept the numbers on a positive note.
Watch carefully for the response of those in the media and in the blahgosphere. They'll be full of the "I told you so" nonsense we've come to expect on this subject.
The response will be nothing more than a confirmation of their negative effort, their academic/intellectual dishonesty, and their over-bearing narcissistic arrogance.
"That is a DIRECT RESULT of the constant pounding of the meme about "the bad economy and the coming recession" that's been planted incessantly in the public mind."
ReplyDeleteWrong. That is a DIRECT result of poor leadership in the economic and government sectors on the part of Dems and Reps. A well run economy would never be manipulated by traders, rumor or failing mortgage lenders. A well run economy wouldn't be outsourcing American jobs to 3rd world countries.
As for net exports--- I laugh. You can currently ship a container from Los Angeles to China for less that it costs to ship that same container across North Carolina-- why? Because the shipping industry has empty freighters sailing back to China every single day but those same freighters never leave China empty.
Only problem with this ed-cone-nomic analysis is that it doesn't fit with the data. Consumer outlays were HIGHER in the 4th quarter than the 3rd, and savings were lower. That is, consumers were spending MORE of their available resources than the previous quarter. Net savings was effectively zero.
ReplyDeleteThe big culprits were the large rise in prices (which makes the real GDP figure go down), a decline in business inventories, slowing growth in exports (the 19% figure from the 3rd quarter couldn't be sustained), and a drop in government spending (we didn't surge on top of the surge). Not much of a story for Ed there.
From the BEA report:
Personal outlays increased $138.3 billion (5.5 percent) in the fourth quarter, compared with an
increase of $131.7 billion (5.3 percent) in the third. Personal saving -- disposable personal income less personal outlays -- was $25.1 billion in the fourth quarter, compared with $56.7 billion in the third. The personal saving rate -- saving as a percentage of disposable personal income -- was 0.2 percent in the fourth quarter, compared with 0.6 percent in the third.
"Consumer outlays were HIGHER in the 4th quarter than the 3rd, and savings were lower. That is, consumers were spending MORE of their available resources than the previous quarter. Net savings was effectively zero."
ReplyDeleteBut the spending was not nearly enough to meet expectations.
That's where rocket scientists like Cone come in handy.
I'm surprised you haven't commented on Professor Williams and Professor Sowell's opinions about the stimulus, Dave.
Bubba:
ReplyDeleteSo consumers were supposed to go (further) into hock to prop up the economy? It sounds like you are the one with unrealistic expectations, not consumers.
To the extent that savings dropped, consumers were actually being more optimistic than what you are giving them credit for.
'So consumers were supposed to go (further) into hock to prop up the economy? It sounds like you are the one with unrealistic expectations, not consumer."
ReplyDeleteNo, Dave.
It's the so-called experts expectations being fufilled, regardless of the easily shunted aside inconsistencies in such expectations.
There's an agenda to be filled, don't you know?
Bubba:
ReplyDeleteYou're right that there's an agenda to be filled--it's your constant apologies for the administration.
The evidence here is that consumers EXCEEDED what we would have expected from them, spending more as a percentage of their income. Your argument is that they somehow held back; it's just not there in the data.
Maybe you can make this argument for businesses, which allowed their inventories to drop. But the argument just doesn't fit for consumers.
"You're right that there's an agenda to be filled--it's your constant apologies for the administration."
ReplyDeleteNo, Dave.
It has NOTHING to do with the Bush Administration.
Climb down out of your Ivory Tower perch and deal with the real world for a change.
You'll learn a lot that you currently don't know.
Bubba:
ReplyDeleteThanks, but I can already see the economy weakening from that perch.