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Thread: GDP Contracted at 1% Pace in First Quarter

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    Re: GDP Contracted at 1% Pace in First Quarter

    Quote Originally Posted by jmotivator View Post
    U.S. GDP Contracted at 1% Pace in First Quarter - WSJ.com

    "he U.S. economy contracted in the first quarter of 2014, the latest stumble for a recovery that has struggled to find its footing since the recession ended almost five years ago."

    The "recovery" is over.
    Whatever the reason, its quite possible we're in the middle of small recession, but wont know for a few months. I bet politicians are very scared right now, given the proximity to the election.

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    Re: GDP Contracted at 1% Pace in First Quarter

    Quote Originally Posted by DA60 View Post
    BTW, less then half of America receives significant snowfall.
    When there are disruptive weather conditions in an area that includes Chicago, Detroit, Indianapolis, Cleveland, Philadelphia, New York City, and Washington, DC, that can have a large impact on overall economic activity. With the exception of Washington, DC, all of those cities registered top-ten seasonal snowfall figures. Detroit had its snowiest winter on record.

    Indeed, if just the three airports in NYC shut down, the impact ripples across all of the nation’s airports. The same impact occurs when shipping is disrupted in one or major ports, etc.

    From the February climate report:

    The persistent cold during winter resulted in 91 percent of the Great Lakes being frozen by the beginning of March, according to NOAA's Great Lakes Environmental Research Laboratory. This was second largest ice cover for the Great Lakes since records began in 1973, and only surpassed by the Great Lakes ice cover in 1979…

    According to NOAA data analyzed by the Rutgers Global Snow Lab, the winter average snow cover extent for the contiguous U.S. was 1.42 million square miles, which was 170,000 square miles above the 1981-2010 average. This marked the 10th largest seasonal snow cover extent in the 1966-present period of record. Above-average snow cover was observed across the northern and eastern U.S., while below-average snow cover was observed from the Southern Rockies westward.

    The U.S. Climate Extremes Index (USCE)) during winter was above average and the 25th highest value on record for the season. Elements that contributed to the above average USCEI included the spatial extent of cold maximum and minimum temperatures and days with precipitation. The USCEI is an index that tracks extremes (falling in the upper or lower ten percent of the record) in temperature, precipitation, and drought across the contiguous United States. The CEI for the West region was record high during winter.


    National Overview - February 2014 | State of the Climate | National Climatic Data Center (NCDC)

    From the March climate report:

    Nearly two-thirds of the Great Lakes remained frozen by early April, impacting commercial shipping…

    A winter storm from March 12-13 dropped up to 26 inches (66 cm) of snow, 0.25 inches (0.6 cm) of ice, and nearly 2 inches (50.8 mm) of rain on the region. Wind gusts of up to 66 mph (29.5 m/s) caused tree and structural damage and triggered ground delays and stops at major Northeast airports. Buffalo, New York, reported blizzard conditions for the second time this winter. That is the first time the city has had blizzard conditions twice in a winter since recordkeeping began, according to NBC News. From March 25-26, a powerful nor'easter affected the region. The brunt of the storm was felt along coastal regions of Massachusetts and far eastern Maine. While snow totals were generally less than a foot, strong winds created problems. In Massachusetts on the 26th, wind gusts up to 83 mph (37.1 m/s) were reported on Nantucket Island, while gusts to 71 mph (31.7 m/s) were reported along Cape Cod. Blizzard conditions occurred for up to 7 hours in those areas. Coastal flooding, beach erosion, downed tree, and power outages also occurred. A storm at the end of the month brought up to 12 inches (30.5 cm) of snow and nearly 6 inches (152.4 mm) or rain to the region. Flooding occurred as waterways spilled their banks, while flash flooding made roads impassable and left cars stuck in up to 3 feet (0.9 m) of water in some areas. With multiple snowstorms during the month, Washington Dulles, DC had its snowiest March on record. The site accumulated 19.8 inches (50.3 cm) of snow during the month, beating the old record of 15.5 inches (39.4 cm) set in 1993.


    National Overview - March 2014 | State of the Climate | National Climatic Data Center (NCDC)

    When ports are periodically closed and bad weather prevails, one would expect hits in exports (goods cannot be shipped from factories to ports and then out of the country) and reduced construction activity. If one takes a closer look at the GDP data, that’s where some of the biggest drag on economic activity occurred (annualized changes): Nonresidential structures: -7.5%; Residential investment: -5.0% (some housing-related dynamics; some weather-related issues); Exports of goods: -9.8%

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    Re: GDP Contracted at 1% Pace in First Quarter

    Quote Originally Posted by CanadaJohn View Post
    I could be wrong, but I believe the first quarter results for the US were a GDP of 0.1%, not 1% - a significant difference, and basically flat. It was anticipated that the GDP would be in the 1.5% range for the quarter so the results are terrible.
    The 0.1% figure was the first estimate. Today's -1.0% change is the revised figure.

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    Re: GDP Contracted at 1% Pace in First Quarter

    Quote Originally Posted by jmotivator View Post
    The +0.1% was the preliminary number. The final number is -1.0%.
    The -1.0% is the second release. Another revised figure will be released on June 25.

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    Re: GDP Contracted at 1% Pace in First Quarter

    Quote Originally Posted by jmotivator View Post
    Stock are a terrible measure of the health of the economy.
    GDP isn't so hot either.

    I do agree that stocks aren't a good measure of the economy. However, it is very clear that the market has completely shrugged off this news, because they fully understand that it is not an indicator that we're headed for another recession, and that many other indicators are looking up.


    I always have to shake my head at the cycle in Economic reporting....
    Erm, okay.... You do realize that claiming "the recovery is over" because GDP fell 1% in Q1 is, basically, an extremely primitive form of economic reporting?

    Now, I will agree that there are often issues with economic reporting, especially in the middle of a bubble. That doesn't affect the validity of the claims in reference to consumer confidence, home sales rates, inventory rates and so forth.


    We haven't fixed anything that was wrong with the 2007 economy.
    If you mean that Congress failed to institute sufficient regulation and to reinstate the separation between commercial banks and speculators, or that it has failed to regulate obscure financial products like derivatives and CDS's and CDO's, or that it hasn't forced banks to hold enough reserves, I'd agree. That also doesn't change the fact that the economy does seem to be on a gradual upward path, rather than heading for another recession.

    There are also many challenges that are very hard to fix. For example, the population is aging, which is going to put a strain on the economy. The only viable bandage is to allow more (and younger) immigrants, who can in turn work in the US, buy stuff in the US and thus increase tax revenues and economic activity. Some politicians on both sides of the aisle are waking up to this, but I'm not currently optimistic that immigration will be tackled any time soon.

    In fact, the only improvement over 2007 is that companies are now stockpiling more cash....
    Actually, it is not great that companies are hoarding cash, because that means employees are getting their wages squeezed, and that capital is not being reinvested into the economy. While it is eminently rational for individual corporations to pursue those courses of actions, it is actually very bad for the economy as a whole, since that capital is locked up and not actually doing anything.

    Similarly, many companies do everything they can to reduce their tax burdens. Good for the individual companies, bad for the country as a whole.


    this administration is hell bent on taking that stockpile under the pretense of economic equality.
    Unless they aren't.

    The only thing the Obama administration has done is slightly increase the top marginal tax rate and some capital gains taxes, which has no effect whatsoever on corporate cash holdings. There are no plans to tax corporate cash holdings or similar assets.

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    Re: GDP Contracted at 1% Pace in First Quarter

    Quote Originally Posted by donsutherland1 View Post
    When there are disruptive weather conditions in an area that includes Chicago, Detroit, Indianapolis, Cleveland, Philadelphia, New York City, and Washington, DC, that can have a large impact on overall economic activity. With the exception of Washington, DC, all of those cities registered top-ten seasonal snowfall figures. Detroit had its snowiest winter on record.

    Indeed, if just the three airports in NYC shut down, the impact ripples across all of the nation’s airports. The same impact occurs when shipping is disrupted in one or major ports, etc.

    From the February climate report:

    The persistent cold during winter resulted in 91 percent of the Great Lakes being frozen by the beginning of March, according to NOAA's Great Lakes Environmental Research Laboratory. This was second largest ice cover for the Great Lakes since records began in 1973, and only surpassed by the Great Lakes ice cover in 1979…

    According to NOAA data analyzed by the Rutgers Global Snow Lab, the winter average snow cover extent for the contiguous U.S. was 1.42 million square miles, which was 170,000 square miles above the 1981-2010 average. This marked the 10th largest seasonal snow cover extent in the 1966-present period of record. Above-average snow cover was observed across the northern and eastern U.S., while below-average snow cover was observed from the Southern Rockies westward.

    The U.S. Climate Extremes Index (USCE)) during winter was above average and the 25th highest value on record for the season. Elements that contributed to the above average USCEI included the spatial extent of cold maximum and minimum temperatures and days with precipitation. The USCEI is an index that tracks extremes (falling in the upper or lower ten percent of the record) in temperature, precipitation, and drought across the contiguous United States. The CEI for the West region was record high during winter.


    National Overview - February 2014 | State of the Climate | National Climatic Data Center (NCDC)

    From the March climate report:

    Nearly two-thirds of the Great Lakes remained frozen by early April, impacting commercial shipping…

    A winter storm from March 12-13 dropped up to 26 inches (66 cm) of snow, 0.25 inches (0.6 cm) of ice, and nearly 2 inches (50.8 mm) of rain on the region. Wind gusts of up to 66 mph (29.5 m/s) caused tree and structural damage and triggered ground delays and stops at major Northeast airports. Buffalo, New York, reported blizzard conditions for the second time this winter. That is the first time the city has had blizzard conditions twice in a winter since recordkeeping began, according to NBC News. From March 25-26, a powerful nor'easter affected the region. The brunt of the storm was felt along coastal regions of Massachusetts and far eastern Maine. While snow totals were generally less than a foot, strong winds created problems. In Massachusetts on the 26th, wind gusts up to 83 mph (37.1 m/s) were reported on Nantucket Island, while gusts to 71 mph (31.7 m/s) were reported along Cape Cod. Blizzard conditions occurred for up to 7 hours in those areas. Coastal flooding, beach erosion, downed tree, and power outages also occurred. A storm at the end of the month brought up to 12 inches (30.5 cm) of snow and nearly 6 inches (152.4 mm) or rain to the region. Flooding occurred as waterways spilled their banks, while flash flooding made roads impassable and left cars stuck in up to 3 feet (0.9 m) of water in some areas. With multiple snowstorms during the month, Washington Dulles, DC had its snowiest March on record. The site accumulated 19.8 inches (50.3 cm) of snow during the month, beating the old record of 15.5 inches (39.4 cm) set in 1993.


    National Overview - March 2014 | State of the Climate | National Climatic Data Center (NCDC)

    When ports are periodically closed and bad weather prevails, one would expect hits in exports (goods cannot be shipped from factories to ports and then out of the country) and reduced construction activity. If one takes a closer look at the GDP data, that’s where some of the biggest drag on economic activity occurred (annualized changes): Nonresidential structures: -7.5%; Residential investment: -5.0% (some housing-related dynamics; some weather-related issues); Exports of goods: -9.8%
    Weather is a desperate cop out and I'm not buying it


    But lets just say its a legitimate excuse.

    After 6 years our economy, the largest economy in the world is so weak that "bad weather" causes the GDP to shrink.

    Uh huh.

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    Re: GDP Contracted at 1% Pace in First Quarter

    Quote Originally Posted by Fenton View Post
    Weather is a desperate cop out and I'm not buying it


    But lets just say its a legitimate excuse.

    After 6 years our economy, the largest economy in the world is so weak that "bad weather" causes the GDP to shrink.

    Uh huh.
    Weather is one factor and it was an important one as the worst of the weather-related impacts occurred during a two-month period that fell in the 1st quarter. That most of the economic data since Q1 has shown a pickup suggests that the factors were likely temporary. The first estimate of Q2 GDP (July 30) will confirm whether or not the dip was temporary. Most economists believe that it was. Furthermore, if there was pent-up demand related to temporary factors one should see annual real GDP growth in the 3%-4% range with some upside potential.

    In any case, we'll know soon enough.

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    Re: GDP Contracted at 1% Pace in First Quarter

    Quote Originally Posted by JRSaindo View Post
    So what in the economy is growing? Show me. Everything I read says people are giving up looking for work in droves. CEO pay has never been higher, yet we are at a stagnant unemployment rate with millions no longer looking for work. How do you spin this as growth?

    I'm not blaming Obama for the problem, as this all started years ago. but he isn't helping it any. We never seem to be proactive, but reactive. That is a huge problem because by the time we finally react, most of the damage is done.
    [emphasis added by bubba]
    graph economic recovery under Obama.jpg
    graph employment change under Obama.jpg
    grapgh chnage in employment by industry under Obama.jpg
    the only shrinkage is in number of government jobs and rate of growth of the federal budget
    areas where the GOP says one thing and does quite another
    we are negotiating about dividing a pizza and in the meantime israel is eating it
    once you're over the hill you begin to pick up speed

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    Re: GDP Contracted at 1% Pace in First Quarter

    Quote Originally Posted by justabubba View Post
    [emphasis added by bubba]
    graph economic recovery under Obama.jpg
    graph employment change under Obama.jpg
    grapgh chnage in employment by industry under Obama.jpg
    the only shrinkage is in number of government jobs and rate of growth of the federal budget
    areas where the GOP says one thing and does quite another
    Doesn't seem like the American public agrees with you

    RealClearPolitics - Election Other - President Obama Job Approval

    Further what you and other liberals always fail to recognize is that when you have a budget as large as Obama's the percentage change is always going to be lower but the amount always much higher. Tell me how the 3.9 trillion dollar Obama budget shows someone interested in lowering the deficit and debt? Seems that the definition of transforming America was interpreted differently by the American people vs Obama's. We are getting exactly what Obama wanted, a European socialist economy with low economic growth, high unemployment, high debt, and an economy dependent on the Federal Govt. thus more people dependent on that govt.

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    Re: GDP Contracted at 1% Pace in First Quarter

    Quote Originally Posted by Redress View Post
    So you will only accept numbers you like. Got it.
    What part of "the FED is unaccountable" did you miss?
    32 “Whoever acknowledges me before others, I will also acknowledge before my Father in heaven. 33 But whoever disowns me before others, I will disown before my Father in heaven.
    Matt. 10:32-33

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