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Thread: Economy Shrank in First Quarter as U.S. Trade Deficit Surged

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    Economy Shrank in First Quarter as U.S. Trade Deficit Surged

    Economy Shrank in First Quarter as U.S. Trade Deficit Surged - Bloomberg Business

    The world’s largest economy hit a bigger ditch in the first quarter than initially estimated, held back by harsh winter weather, a strong dollar and delays at ports.
    Gross domestic product in the U.S. shrank at a 0.7 percent annualized rate, revised from a previously reported 0.2 percent gain, according to Commerce Department figures issued Friday in Washington. The median forecast of 84 economists surveyed by Bloomberg called for a 0.9 percent drop. By contrast, the report also showed incomes climbed, fueling the debate on whether GDP is being underestimated.
    I wonder if conservatives will reiterate the belief that Obama has done nothing in regards to the economy? So, good or bad, it's not relatable to him.

    Or is it only the bad that's his fault?
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    Re: Economy Shrank in First Quarter as U.S. Trade Deficit Surged

    Quote Originally Posted by Tettsuo View Post
    Economy Shrank in First Quarter as U.S. Trade Deficit Surged - Bloomberg Business



    I wonder if conservatives will reiterate the belief that Obama has done nothing in regards to the economy? So, good or bad, it's not relatable to him.

    Or is it only the bad that's his fault?
    I think it's the last two quarters. Conservatives know that our fiscal policy is stupid. Nobody can do anything about it because of the idiot in chief. His idea of tax policy is to increase it and put more people on the dole.
    "A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury." Attributed to Alexander Tytler

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    Re: Economy Shrank in First Quarter as U.S. Trade Deficit Surged

    McConnell said the GOP takeover of Congress caused the economic uptick earlier this year, so now he's got to take the blame for the sluggishness.

    I'm sure Mitch will stand up in Congress later today to take the blame.
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    Re: Economy Shrank in First Quarter as U.S. Trade Deficit Surged

    Quote Originally Posted by sawdust View Post
    I think it's the last two quarters. Conservatives know that our fiscal policy is stupid. Nobody can do anything about it because of the idiot in chief. His idea of tax policy is to increase it and put more people on the dole.
    The trade deficit has what to do with tax policy, exactly?
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    Re: Economy Shrank in First Quarter as U.S. Trade Deficit Surged

    Quote Originally Posted by Tettsuo View Post
    Economy Shrank in First Quarter as U.S. Trade Deficit Surged - Bloomberg Business



    I wonder if conservatives will reiterate the belief that Obama has done nothing in regards to the economy? So, good or bad, it's not relatable to him.

    Or is it only the bad that's his fault?
    Seems we are in about the same shape as we have been the last few years. Q1 seems to show weakness, then a rebound in the next few quarters. Economy overall stays in the 2-2.5% growth.

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    Re: Economy Shrank in First Quarter as U.S. Trade Deficit Surged

    Quote Originally Posted by SenorXm/Sirius View Post
    McConnell said the GOP takeover of Congress caused the economic uptick earlier this year, so now he's got to take the blame for the sluggishness.

    I'm sure Mitch will stand up in Congress later today to take the blame.
    McConnell deserves some blame, he has not done much to try and stop Obama, he's been a bit of a door mat.

    But, nothing new here, a weak economy and Obama's policies just suck more and more life out of it. As I've said before, he had a template from the '80's on how to revive the economy, and he did the opposite.

    He is not all that concerned with the economy or how people are doing. Social programs and government control are at the top of his list, and it, quite obviously, shows.
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    Re: Economy Shrank in First Quarter as U.S. Trade Deficit Surged

    Quote Originally Posted by Tettsuo View Post
    Economy Shrank in First Quarter as U.S. Trade Deficit Surged - Bloomberg Business

    I wonder if conservatives will reiterate the belief that Obama has done nothing in regards to the economy? So, good or bad, it's not relatable to him.

    Or is it only the bad that's his fault?
    Again, I would hope for the last time, it is not all or nothing.

    A President is not entirely responsible for economic results nor is a President entirely immune from culpability for those results. The fact of the matter is we do *not* have a hands off market economic model, we *do* have a mixed economic model where economic policy, fiscal policy, and monetary policy all play parts in our very complex system of economy.

    When you consider GDP calculation it is not complicated to understand why GDP for 2015 Q1 was recalculated to be -0.7% vs. the original calculation of 0.2%. The equation is not all that complicated but the accumulation of that data behind the math is subject to revision and clarification based on all factors and sources. A larger trade deficit speaks directly to E, or Excess of Exports over Imports (in our case this is usually a negative number.) Smaller accumulation of business inventories speaks directly to I, or Investment made by Industry. And, a downward revision to consumer spending speaks directly to C, Consumer Spending. When these numbers change, or are further clarified, the GDP math changes.

    Our political issue is how much a President's (and associated Congress') prior actions influence any one quarter's results. In this case it appears our government's influence on these single quarter's results is next to nil. One key issue that is still somewhat unresolved is how we handle seasonal fluctuations. The best example to use for this is how we "normalize" both retail sales and residential construction starts data. Every single year retail sales tend to rise in correlation with the holiday shopping season, and every single year residential construction starts falls due to weather conditions in roughly the same time period. So the data is "normalized" to account for this. We have to normalize this as the GDP results tends to influence political and monetary policies. We do this so frequently it tends to make our mixed economic model subject to political reaction.

    Most economists agree that the disappointing 2013 Q1, 2014 Q1 and 2015 Q1 results have more to do with issues related to input data normalization effort than any one economic, or fiscal, or monetary policy we have seen to date. Makes sense as the former has more impact with the quarter to quarter GDP results, and the latter has more to do with overall trend lines over several year's worth of GDP results.

    Therefor it is a bit naive to suggest we should run out and blame the President and Congress (any President and Congress) for any single quarter's GDP results. We can however blame a President (and Congress) for actions which seem to make an overall influence on the results over time. Saying the lackluster recovery is something we can pin on politics, saying one quarter was that was adjusted to account for data clarification is the fault of politics is naive. Since we already know that 2015 Q2 is looking to be somewhere in the 2% range we can conclude the math adjustments seem to be the culprit, over any single action of the President and Congress that directly harmed only one quarter's results.
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    Re: Economy Shrank in First Quarter as U.S. Trade Deficit Surged

    Quote Originally Posted by OrphanSlug View Post
    Again, I would hope for the last time, it is not all or nothing.

    A President is not entirely responsible for economic results nor is a President entirely immune from culpability for those results. The fact of the matter is we do *not* have a hands off market economic model, we *do* have a mixed economic model where economic policy, fiscal policy, and monetary policy all play parts in our very complex system of economy.

    When you consider GDP calculation it is not complicated to understand why GDP for 2015 Q1 was recalculated to be -0.7% vs. the original calculation of 0.2%. The equation is not all that complicated but the accumulation of that data behind the math is subject to revision and clarification based on all factors and sources. A larger trade deficit speaks directly to E, or Excess of Exports over Imports (in our case this is usually a negative number.) Smaller accumulation of business inventories speaks directly to I, or Investment made by Industry. And, a downward revision to consumer spending speaks directly to C, Consumer Spending. When these numbers change, or are further clarified, the GDP math changes.

    Our political issue is how much a President's (and associated Congress') prior actions influence any one quarter's results. In this case it appears our government's influence on these single quarter's results is next to nil. One key issue that is still somewhat unresolved is how we handle seasonal fluctuations. The best example to use for this is how we "normalize" both retail sales and residential construction starts data. Every single year retail sales tend to rise in correlation with the holiday shopping season, and every single year residential construction starts falls due to weather conditions in roughly the same time period. So the data is "normalized" to account for this. We have to normalize this as the GDP results tends to influence political and monetary policies. We do this so frequently it tends to make our mixed economic model subject to political reaction.

    Most economists agree that the disappointing 2013 Q1, 2014 Q1 and 2015 Q1 results have more to do with issues related to input data normalization effort than any one economic, or fiscal, or monetary policy we have seen to date. Makes sense as the former has more impact with the quarter to quarter GDP results, and the latter has more to do with overall trend lines over several year's worth of GDP results.

    Therefor it is a bit naive to suggest we should run out and blame the President and Congress (any President and Congress) for any single quarter's GDP results. We can however blame a President (and Congress) for actions which seem to make an overall influence on the results over time. Saying the lackluster recovery is something we can pin on politics, saying one quarter was that was adjusted to account for data clarification is the fault of politics is naive. Since we already know that 2015 Q2 is looking to be somewhere in the 2% range we can conclude the math adjustments seem to be the culprit, over any single action of the President and Congress that directly harmed only one quarter's results.
    I agree.

    But, when Conservatives make it a point to dump all economic results on the president... at day one... must also credit that same president when their prediction of doom do not come to pass and the end results are overall positive. In fact, those same people need to praise the president. But, will that happen? Nope.

    The problem is, there's no honor or culpability in our political system. The doomsayers can make their blanket predictions and when proven wrong, they suffer no ill. The same applied to this messageboard. Those that follow blindly can say the most outlandish things, and those that side with them will never point out the error in their statements so long as they tow the line. The line of the past few years is: Obama IS causing the downfall of America. Facts be damned.

    Personally, I just want to make fun of them. But hopefully, the sheeple will wake up and see it for what it is.
    A man without fear is a fool, a man that succumbs to his fear is a coward and a brave man acknowledges fear yet presses on.
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    Re: Economy Shrank in First Quarter as U.S. Trade Deficit Surged

    Quote Originally Posted by Anthony60 View Post
    McConnell deserves some blame, he has not done much to try and stop Obama, he's been a bit of a door mat.

    But, nothing new here, a weak economy and Obama's policies just suck more and more life out of it. As I've said before, he had a template from the '80's on how to revive the economy, and he did the opposite.

    He is not all that concerned with the economy or how people are doing. Social programs and government control are at the top of his list, and it, quite obviously, shows.
    Yeah, there's not a sentence I agree with here. And the 80"s?? Trickle down has been proven to be a failure, was then, and still is.

    Anyway all presidents gets too much blame when the economy is bad, and too much credit when the economy is good. In the case of Obama he gets no credit when it's going good, and all the blame when it's sluggish. Whatever.
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    Re: Economy Shrank in First Quarter as U.S. Trade Deficit Surged

    For perspective:

    The last 8 quarters of annualized real GDP growth have been:

    2013 Q2 +1.8%
    2013 Q3 +4.5%
    2013 Q4 +3.5%

    2014 Q1 -2.1%
    2014 Q2 +4.6%
    2014 Q3 +5.0%
    2014 Q4 +2.2%

    2015 Q1 -0.7%

    http://www.bea.gov/newsreleases/nati...dp1q15_2nd.pdf

    Average annual growth rate for the past 2 years (2013 Q1 through 2015 Q1): +3.2%
    Growth rate for the past year (2014 Q1 through 2015 Q1): +2.7%

    Last year, weather played a huge role in the temporary contraction. A big snap back followed. This year, weather and a work stoppage contributed. However, there was a headwind created from the rising dollar, which adversely impacted the trade balance. Improved competitiveness is a slower process, so the second quarter rebound will very likely be less than what occurred last year (2%-3%? vs. 4.6%). The temporary factors related to the weather and work stoppage that impacting shipping will no longer have an impact and there will likely have been some pent-up demand that is reflected in Q2's figures (for which the first estimate will be released on July 30).

    Overall, the narrative of general economic expansion continues. The pace of growth remains modest to moderate. The Fed's Beige Book to be released on June 3 will provide fresh insight and, I suspect, it will reaffirm the growth narrative.

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