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Economy Grows by Most in a Decade on U.S. Consumer-Spending Gain

Tettsuo

Tettsuo

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Economy Grows by Most in a Decade on U.S. Consumer-Spending Gain - Bloomberg

The world’s largest economy surged in the third quarter, expanding at the fastest pace in more than a decade, as U.S. consumers and businesses spent more than previously estimated.Gross domestic product grew at a 5 percent annual rate from July through September, the biggest advance since the third quarter of 2003, and up from a previously estimated 3.9 percent, revised figures from the Commerce Department showed today in Washington. The median forecast of 75 economists surveyed by Bloomberg projected a 4.3 percent increase.
Consumer spending is poised to charge into 2015 as more employment and lower gasoline prices boost household confidence and buying power, one reason why the Federal Reserve will probably raise interest rates next year. Other aspects of GDP, including inventories, trade and government spending, are unlikely to maintain the strength seen last quarter, indicating the pace of growth will moderate at the end of the year.
“After five years of weak growth, the economy is finally coming out of rehab,” Ethan Harris, co-head of global economics research at Bank of America Corp. in New York, said in a research note before the report. “Look for the Fed to change policy in a way that only slowly and modestly tightens financial conditions.”
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More good news!

Oh wait... this can't be true if it's good for Obama. :roll:
 
This is a welcome development. It also helps illustrate just how strong a headwind household deleveraging had been in capping earlier growth.
 
It should continue to grow if gas prices stay low. If oil surges, the then the economy slows.
 
Tettsuo said:
Oh wait... this can't be true if it's good for Obama.
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Is it?

With all this economic improvement going on the Fed is going to be hard pressed to continue justifying historically low interest rates.

When interest rates increase we'll all be able to enjoy the real results of President Obama's record borrowing.

At some point over the next two years servicing the debt is going to cost as much as, if not more than, funding the Department of Defense.

That's not good for America, and I can't see any way that it would be good for Democrat electoral aspirations.

At the end of the day, President Obama will have thrown the country, and his own party, under the bus and he'll walk away from office as the failure that anyone who has been paying attention knows he's always been.
 
Declan said:
It should continue to grow if gas prices stay low. If oil surges, the then the economy slows.
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This is true.

However no amount of growth will suffice as far as the FedGov is concerned. The more we make, the more they take.
 
Declan said:
It should continue to grow if gas prices stay low. If oil surges, the then the economy slows.
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Indeed. These two facets of the economy are pretty closely linked.

Gas, by it's very nature, are pretty high up in the consumer's 'gotta have' and preempts other spending, hey, people gotta get to work and such. Falling prices at the pump frees up cash for other things, and in the season, that'll be more spending for gifts and such. I'm expecting a good year for the retailers.

As quickly as these falling oil prices put more spending money in consumer's pockets, will be as quickly raising gas prices will take that spending away a well.
 
eohrnberger said:
Indeed. These two facets of the economy are pretty closely linked.

Gas, by it's very nature, are pretty high up in the consumer's 'gotta have' and preempts other spending, hey, people gotta get to work and such. Falling prices at the pump frees up cash for other things, and in the season, that'll be more spending for gifts and such. I'm expecting a good year for the retailers.

As quickly as these falling oil prices put more spending money in consumer's pockets, will be as quickly raising gas prices will take that spending away a well.
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It is a balancing I think. Nonconventional production hires a lot of people which benefits the economy, but for consumers who do not work in the industry, the multiplier effect of energy spending is largely non-existent compared to retail. Hopefully an equilibrium will be reached that allows continued job growth within oil and gas extraction but sustainable lower energy costs for consumers. Hopefully lower energy costs will create a further cushion to allow competition to further drive down other costs on non-discretionary goods like food which will create even more discretionary spending.

A good sign. I had hoped this would have broken through last year to shorten the dead decade some, but we seem to have turned a corner in a bit of a political ironic way--big oil saves democratic face
 
WCH said:
This is true.

However no amount of growth will suffice as far as the FedGov is concerned. The more we make, the more they take.
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As it should be.
 
jonny5 said:
Why is that? What about producing more wealth has anything to do with increasing taxes?
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an unbalanced budget, unstated long-term national debt of $100T, and a stated national debt of $18T with interest only payments lead me to a different conclusion than you.
 
Declan said:
It is a balancing I think. Nonconventional production hires a lot of people which benefits the economy, but for consumers who do not work in the industry, the multiplier effect of energy spending is largely non-existent compared to retail. Hopefully an equilibrium will be reached that allows continued job growth within oil and gas extraction but sustainable lower energy costs for consumers. Hopefully lower energy costs will create a further cushion to allow competition to further drive down other costs on non-discretionary goods like food which will create even more discretionary spending.

A good sign. I had hoped this would have broken through last year to shorten the dead decade some, but we seem to have turned a corner in a bit of a political ironic way--big oil saves democratic face
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"Hopefully lower energy costs"Yes indeed. I agree. Increases in energy, fuel and transportation costs is about as regressive as you can get.

However, I don't think that Obama's on board with those sentiments.

"Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket," Obama told the Chronicle . "Coal-powered plants, you know, natural gas, you name it, whatever the plants were, whatever the industry was, they would have to retrofit their operations. That will cost money. They will pass that money on to consumers."
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Obama said cap and trade would increase electricity rates | PolitiFact

“If somebody wants to build a coal-fired power plant, they can. It’s just that it will bankrupt them,” Obama said, responding to a question about his cap-and-trade plan. He later added, “Under my plan … electricity rates would necessarily skyrocket.”
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Uttered in 2008, still haunting Obama in 2012 - Erica Martinson - POLITICO.com

“Somehow,” Chu said, “we have to figure out how to boost the price of gasoline to the levels in Europe.”
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Steven Chu's Europe gas quote haunts President Obama - Bob King - POLITICO.com

And they are proud of themselves for having this position.
Chu gives himself an "A": Obama's energy secretary dishonest in ratings (Video) | Washington Times Communities
 
Yeah, thanks Obama!

Gasoline $2.19 a gallon in Wisconsin,

thanks Obama!
 
Tettsuo said:
Economy Grows by Most in a Decade on U.S. Consumer-Spending Gain - Bloomberg





More good news!

Oh wait... this can't be true if it's good for Obama. :roll:[/FONT][/COLOR]
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An improving economy is always good news. And just think, only two more years of Obama with a Republican Congress to keep him under wraps and American businesses may decide to get back in the game and invest for the good times to come.

If liberals want to tout Obama in this scenario, who cares - he's irrelevant - but after 6 disastrous years, you can have that bone to chew on if it helps you forget.
 
eohrnberger said:
However, I don't think that Obama's on board with those sentiments.
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He just wants to push alternative energies. I understand the motive, but I think they are pushing in the wrong direction looking for only large scale commercial production which just isn't realistic.
 
Declan said:
He just wants to push alternative energies. I understand the motive, but I think they are pushing in the wrong direction looking for only large scale commercial production which just isn't realistic.
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The innovation isn't going to come from the large scale commercial green sector, on that I think we agree.

Where we probably diverge is the idea that government can influence the free market (relatively free) to such an extent that will make these green technology projects economically viable on their own, as opposed to, and historically the case, dependent on government life support (endless supply of free or nearly free government money).

The first economically viable green energy technology, one that can turn a profit on it's own by it's own merits, is going to have the entire world at their door wanting to buy it. It's at that point, where that particular technology will be successful, and only at that point, will be able to displace the older technology. Until that point, it'll remain a niche market player appealing to those who want to spend more for less, which is an extremely small market.
 
eohrnberger said:
The innovation isn't going to come from the large scale commercial green sector, on that I think we agree.

Where we probably diverge is the idea that government can influence the free market (relatively free) to such an extent that will make these green technology projects economically viable on their own, as opposed to, and historically the case, dependent on government life support (endless supply of free or nearly free government money).

The first economically viable green energy technology, one that can turn a profit on it's own by it's own merits, is going to have the entire world at their door wanting to buy it. It's at that point, where that particular technology will be successful, and only at that point, will be able to displace the older technology. Until that point, it'll remain a niche market player appealing to those who want to spend more for less, which is an extremely small market.
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Which is why government invests into research - hence influencing the free market. It's not just subsidies, research is the where the real money should be invested.
 
whysoserious said:
Which is why government invests into research - hence influencing the free market. It's not just subsidies, research is the where the real money should be invested.
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Research is fine, as long as it's not a major spend. Outright subsidies, such as we have seen in the past, shouldn't be the case. For any businesses or industry. I'm against corporate welfare however it's dressed up, unless it's to maintain a level playing field.

The Import / Export bank, for example. I know that there's government programs in other countries that guarantees and / or insures their businesses against some types of losses when conducting international trade. Isn't the intent of the import / export just to level that playing field?
 
eohrnberger said:
Research is fine, as long as it's not a major spend. Outright subsidies, such as we have seen in the past, shouldn't be the case. For any businesses or industry. I'm against corporate welfare however it's dressed up, unless it's to maintain a level playing field.

The Import / Export bank, for example. I know that there's government programs in other countries that guarantees and / or insures their businesses against some types of losses when conducting international trade. Isn't the intent of the import / export just to level that playing field?
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Normally I'm against corporate bailout but I do think the huge bailout that took place during the recession was necessary, despite whatever my beliefs are, if those banks failed who knows where the hell we would have been today.

Also, research should be one of the lesser of the majors so to speak. There are tons of things we are using the money for right now that could definitely go to research instead.
 
eohrnberger said:
The innovation isn't going to come from the large scale commercial green sector, on that I think we agree.

Where we probably diverge is the idea that government can influence the free market (relatively free) to such an extent that will make these green technology projects economically viable on their own, as opposed to, and historically the case, dependent on government life support (endless supply of free or nearly free government money).

The first economically viable green energy technology, one that can turn a profit on it's own by it's own merits, is going to have the entire world at their door wanting to buy it. It's at that point, where that particular technology will be successful, and only at that point, will be able to displace the older technology. Until that point, it'll remain a niche market player appealing to those who want to spend more for less, which is an extremely small market.
Click to expand...

I don't think we diverge so much as we have a different thought process. The US has a housing stock surplus. The greenest house is one that is already built. I would welcome the government doing more to spur people to acquire these properties, upgrade them, add in what green they can, and wait for the technology to evolve. The profit from the volume of sales of on demand hotwater, solar assist heating, radiant floor heating with geothermal or solar preheating, etc, would spur development of newer technologies in those areas.
 
Luftwaffe said:
Normally I'm against corporate bailout but I do think the huge bailout that took place during the recession was necessary, despite whatever my beliefs are, if those banks failed who knows where the hell we would have been today.

Also, research should be one of the lesser of the majors so to speak. There are tons of things we are using the money for right now that could definitely go to research instead.
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The TARP program, well, what can you say about that, it was that or a 10 times worse recession. But still, I think that more of the banks that created the hole should have been far more seriously dinged for that. As it was, we ended up with the Wall Street bailout and no Main Street bailout. Wall Street is probably fully recovered. Main Street is still hurting. Best government money can buy.

I still think that a Glass-Stegall type of separation / firewall should be re-instituted and enforced. Isolate the rich investment high risk sector from the commercial corner bank sector. When one funds the risk of the other, the whole house of cards comes down in bad times, as we've seen.
 
Declan said:
I don't think we diverge so much as we have a different thought process. The US has a housing stock surplus. The greenest house is one that is already built. I would welcome the government doing more to spur people to acquire these properties, upgrade them, add in what green they can, and wait for the technology to evolve. The profit from the volume of sales of on demand hotwater, solar assist heating, radiant floor heating with geothermal or solar preheating, etc, would spur development of newer technologies in those areas.
Click to expand...

Hmm. Now that's an interesting idea. The existing technologies that you mention are as old as the Romans (BTW). :)
 
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