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US Economic Growth Slows in Fourth Quarter on Surging Imports

MrWonka

MrWonka

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https://www.reuters.com/article/us-...urth-quarter-on-surging-imports-idUSKBN1FF0F8

"Economists polled by Reuters had forecast the economy growing at a 3.0 percent pace in the final three months of 2017. The economy grew 2.3 percent in 2017"

"While the corporate income tax rate has been slashed to 21 percent from 35 percent and taxes for households have also been lowered, economists see only a modest boost to GDP growth as the fiscal stimulus is coming at a time when the economy is almost at full employment."

So, in the one quarter of the year that is most likely to have been impacted by Trump's policies(if you can call them that), growth actually slowed down. And while deficit spending is widely known to grow the economy and create jobs, most economists realize that it's a pointless waste of money when the economy is already doing just fine thanks to Obama. We're creating a bubble, and simultaniously making it harder for ourselves to recover from it.
 
MrWonka said:
https://www.reuters.com/article/us-...urth-quarter-on-surging-imports-idUSKBN1FF0F8

"Economists polled by Reuters had forecast the economy growing at a 3.0 percent pace in the final three months of 2017. The economy grew 2.3 percent in 2017"

"While the corporate income tax rate has been slashed to 21 percent from 35 percent and taxes for households have also been lowered, economists see only a modest boost to GDP growth as the fiscal stimulus is coming at a time when the economy is almost at full employment."

So, in the one quarter of the year that is most likely to have been impacted by Trump's policies(if you can call them that), growth actually slowed down. And while deficit spending is widely known to grow the economy and create jobs, most economists realize that it's a pointless waste of money when the economy is already doing just fine thanks to Obama. We're creating a bubble, and simultaniously making it harder for ourselves to recover from it.
Click to expand...

I can remember the Gov't referring to "growing out of the debt," and suspect that such infantile thoughts may be driving our economic policy at this time. The USDollar dropped about 18% and if it had been the Chinese RNB, US economists and the gov't would be howling currency manipulation at the top of their lungs. I note the silence as regards any manipulation by the USA. Now Nations holding US Treasuries must have lost 18% in this same period, ergo they might not want to keep holding their USTreasuries or buy any more. That would just be good common sense. Lots more exports because of lower relative costs, and less imports because of higher relative costs and also higher costs as inflation drivers. Even basic morons see the logic of "you cannot borrow your way out of debt," but you can delay the agony. IS that where we are at as a Nation? Do bubbles pop? What collaterolizes US Fiat Currency? Will reality create World-wide demand for a hard currency with intrinsic value? Why would Russia and China be initiating a Gold-backed trading system? Would it be necessary to have World Wide economic hegemony by military control to prevent a Fiat Currency crash? To allude to your question, "Recover from it?" Only in the movies!
/
 
MrWonka said:
https://www.reuters.com/article/us-...urth-quarter-on-surging-imports-idUSKBN1FF0F8

"Economists polled by Reuters had forecast the economy growing at a 3.0 percent pace in the final three months of 2017. The economy grew 2.3 percent in 2017"

"While the corporate income tax rate has been slashed to 21 percent from 35 percent and taxes for households have also been lowered, economists see only a modest boost to GDP growth as the fiscal stimulus is coming at a time when the economy is almost at full employment."

So, in the one quarter of the year that is most likely to have been impacted by Trump's policies(if you can call them that), growth actually slowed down. And while deficit spending is widely known to grow the economy and create jobs, most economists realize that it's a pointless waste of money when the economy is already doing just fine thanks to Obama. We're creating a bubble, and simultaniously making it harder for ourselves to recover from it.
Click to expand...

If deficit spending was excessive, considering full employment, we should start seeing inflation. Yet we're not. So I don't really agree with that point, though I do disagree with the tax bill. Also I don't see how we're "making a bubble".
 
MrWonka said:
https://www.reuters.com/article/us-...urth-quarter-on-surging-imports-idUSKBN1FF0F8

"Economists polled by Reuters had forecast the economy growing at a 3.0 percent pace in the final three months of 2017. The economy grew 2.3 percent in 2017"

"While the corporate income tax rate has been slashed to 21 percent from 35 percent and taxes for households have also been lowered, economists see only a modest boost to GDP growth as the fiscal stimulus is coming at a time when the economy is almost at full employment."

So, in the one quarter of the year that is most likely to have been impacted by Trump's policies(if you can call them that), growth actually slowed down. And while deficit spending is widely known to grow the economy and create jobs, most economists realize that it's a pointless waste of money when the economy is already doing just fine thanks to Obama. We're creating a bubble, and simultaniously making it harder for ourselves to recover from it.
Click to expand...

As I said with Obama and Bush, one quarter is meaningless. Looking at the entire year, things are much improved. Almost a full percent better than 2016. Thats an extra 100bn in new wealth. Not saying Trump is the cause, but its not a stretch to see business confidence in him.
 
Khayembii Communique said:
If deficit spending was excessive, considering full employment, we should start seeing inflation. Yet we're not. So I don't really agree with that point, though I do disagree with the tax bill. Also I don't see how we're "making a bubble".
Click to expand...

Deficit spending wasn't excessive, it was directed poorly. That's why we're not seeing inflation AND we're not seeing much growth, either. But we'll still have to manage the debt.
 
Khayembii Communique said:
If deficit spending was excessive, considering full employment, we should start seeing inflation. Yet we're not.
Click to expand...
Well, actually we kind of are. That's why they are raising interest rates, but the excessive deficit spending hasn't really taken effect. The tax plan takes effect this year so if we're going to see it we would see it soon.

However since the primary benefits of the deficit spending are millionaires and billionaires who can already afford to purchase everything the realistically need and or want it's unlikely to fuel a ton of inflation.

Khayembii Communique said:
Also I don't see how we're "making a bubble".
Click to expand...

The more money millionaires and billionaires have to lay around the more they tend to invest in ever more high-risk investments. It's like someone going to a Casino, the more they win, the more confident they get the more they try and play higher stakes games until poof it's all gone. That is precisely what happened under the Bush administaration. The economy was doing just fine. It didn't really need the stimulus, and it really didn't really fuel any real economic growth. Instead what happened is millionaires and billionaires started investing in subprime mortgages. They were high risk, but nobody cared because they had plenty of money laying around and there was no sign of a slow down....until their was.

Deficit spending is okay for getting yourself out of an economic mess, particularly if you focus on helping out the the middle class, and lower-income people living paycheck to paycheck. But when the economy is already humming along just fine you need to dial it back, and start getting the debts you accrued under control to keep the economy from going too far in the other direction, and to make sure that if you have another collapse you have some leeway to borrow again.
 
jonny5 said:
As I said with Obama and Bush, one quarter is meaningless. Looking at the entire year, things are much improved.
Click to expand...
The U.S. Economy is absolutely massive. The notion that it could be instantaneously turned around on a dime is nonsensical. Even if Trump truly had any influence on the economy there is no realistic way we would see it until at minimum the second half of 2017. One quarter may not be a big deal, but each successive quarter is more reflective of Trump than Obama.
 
MrWonka said:
Well, actually we kind of are. That's why they are raising interest rates
Click to expand...

Raising interest rates doesn't have to do with inflation; they're raising them because the economy is strong despite weak inflation.

The more money millionaires and billionaires have to lay around the more they tend to invest in ever more high-risk investments. It's like someone going to a Casino, the more they win, the more confident they get the more they try and play higher stakes games until poof it's all gone.
Click to expand...

Well first off this isn't really how investing works. Just because you have more money doesn't mean you start putting money into riskier investments. That doesn't make sense.

Second, this is just some general statement. You said we're making a bubble so I wanted to know where this bubble is.

Instead what happened is millionaires and billionaires started investing in subprime mortgages. They were high risk, but nobody cared because they had plenty of money laying around and there was no sign of a slow down....until their was.
Click to expand...

But that's not what happened at all. The crisis was caused by a risk-return mismatch due to the fact that investors didn't know the level of risk in the securities. People still invest in subprime mortgages.

Deficit spending is okay for getting yourself out of an economic mess, particularly if you focus on helping out the the middle class, and lower-income people living paycheck to paycheck. But when the economy is already humming along just fine you need to dial it back, and start getting the debts you accrued under control to keep the economy from going too far in the other direction, and to make sure that if you have another collapse you have some leeway to borrow again.
Click to expand...

The US can borrow as much as it wants.
 
i don't see how any one with any logical sense can say that the tax cuts have had anything to do with it as they weren't
even passed in the last quarter of 2017.

we should start seeing what impact they have this year not last year.
 
Khayembii Communique said:
If deficit spending was excessive, considering full employment, we should start seeing inflation. Yet we're not. So I don't really agree with that point, though I do disagree with the tax bill. Also I don't see how we're "making a bubble".
Click to expand...
I believe though we are just starting to turn to an inflationary economy. We have rising interest rates, and even the start of rising wages (how about that - finally!).

And now with Trump implementing tariffs, I expect to see even more rising prices.
 
jonny5 said:
As I said with Obama and Bush, one quarter is meaningless. Looking at the entire year, things are much improved. Almost a full percent better than 2016. Thats an extra 100bn in new wealth. Not saying Trump is the cause, but its not a stretch to see business confidence in him.
Click to expand...
Yes, an improvement over 2016, but no different really than the averages over much of the Obama Presidency.

The decline in 4Q put's 2017 at 2.3% growth. I'll take it, but it's no different than the average trendline over the previous 6 or 7 years.
 
Khayembii Communique said:
If deficit spending was excessive, considering full employment, we should start seeing inflation. Yet we're not. So I don't really agree with that point, though I do disagree with the tax bill. Also I don't see how we're "making a bubble".
Click to expand...

The bubble danger comes from the windfall for the wealthy in the tax bill. Their already swollen bank accounts will be even more aggressive looking for returns on all that cash they are sitting on. As we saw under Bush, financial institutions will respond with more and more risky schemes that can and will collapse. What it will be is the only question.
 
Chomsky said:
Yes, an improvement over 2016, but no different really than the averages over much of the Obama Presidency.

The decline in 4Q put's 2017 at 2.3% growth. I'll take it, but it's no different than the average trendline over the previous 6 or 7 years.
Click to expand...

It is also slower growth than 2015 and it has nowhere to go but down I'm afraid. The weakening dollar and punitive tariffs will help trade deficits but slow our growth by increasing costs for the U.S consumer.
 
Chomsky said:
Yes, an improvement over 2016, but no different really than the averages over much of the Obama Presidency.

The decline in 4Q put's 2017 at 2.3% growth. I'll take it, but it's no different than the average trendline over the previous 6 or 7 years.
Click to expand...

If you average out Obama, its already above average, 2.7% for 3 quarters vs 2.1% avg post recession. We'll see if the tax cuts have a stimulative effect in a year.
 
MrWonka said:
The U.S. Economy is absolutely massive. The notion that it could be instantaneously turned around on a dime is nonsensical. Even if Trump truly had any influence on the economy there is no realistic way we would see it until at minimum the second half of 2017. One quarter may not be a big deal, but each successive quarter is more reflective of Trump than Obama.
Click to expand...

Certainly, though neither really have a massive effect. They can only help prod it a little. And its not like Trump wrote the tax bill. The GOP in congress did that.
 
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