2nd Quarter GDP Numbers

[Swing low, sweet chariot. Comin' for to carry me home.]

they come out this friday, market is expecting -1.5%

[Swing low, sweet chariot. Comin' for to carry me home.]

Compared with the same quarter 1 year ago (Table :

Q2 2009: -3.9%
Q1 2009: -3.3%

Q4 2008: -1.9%
Q3 2008: +0.0%
Q2 2008: +1.6%
Q1 2008: +2.0%

http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

yeah, the economy declined at around a 6% annual rate in Q42008 and Q12009....we already knew that...what's your point?

[Swing low, sweet chariot. Comin' for to carry me home.]

Read the internals and revisions, folks.  They say "bad".

of course they were bad, we were in recession.  but they also piont to a good recovery - production has been cut way below the level of demand, meaning production will have to ramp up very soon.

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But, then again, you folks never read the internals and revisions, so what's the point.  I may help you out later, if I really care about doing so. 

yeah, I know, you're the only one that reads

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Btw, if federal government spending increases as much as I think it might, you may see a positive GDP 3rd quarter.  Be careful and don't believe it. 

One internal that I will provide says that the federal government's increase in spending by 13% over last quarter supposedly, according the calculation method the feds use, bumped up GDP by 1.13%.  Remember, all this is possible until it isn't.

1) that's the exact idea of the stimulus - increase demand until the private sector gets back on its feet.  The very thing Hoover failed to do in 1930, when he was still trying to balance the budget.

2) and if you would take the time to read into the leading indicators, instead of focusing on the view in the rearview mirroe, you'll see the private sector is doing all the things it typically does immediately prior to a recovery. 

The truth of the matter, that will be undeniable in the months to come (though, I'm sure you'll still be discounting it, instead of admitting that you're wrong), is:  the private sector is ALREADY in recovery and the government stimulus will only add to its momentum.

[Swing low, sweet chariot. Comin' for to carry me home.]

To be fair, Hoover wasn't trying to balance the budget until 1932.

actually, he was preaching a balanced budget the whole time.

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The internals do say bad-- PCE, which increased in the first quarter, sharply declined in the second quarter.

a 1.2% decline is "sharply"?  and it only increased 0.6% in Q1 while decreasing by ~3.5% in Q32008 and in Q42009.

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If this trend continues, there is no way the recession is over. Just keep that in mind. In order for there to be a real recovery PCE must start going up.

obviously, but the trend will not continue.  GDP growth for the 2nd half of the year will be in the range of 2.0% to 4.0%, with similar gains in PCE by Q4

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What I'm getting from the most recent month's numbers is that corporations and Wall street are doing fine-- but Main street is not doing fine, and we know who supports who...

actually, they support each other, but wall street and corporations lead us out of recessions, not Main Street.

[Swing low, sweet chariot. Comin' for to carry me home.]

Beet, in regard to PCE growth and how it can start growing while unemployment continues to climb, think about it this way:  the top 10% of wage earners make up around 50% of consumer spending!

So, once the top 10% realize that the bottom really isn't going to fall out, they'll start spending more.  And since they've not been spending for about a year, there's a awful lot of pent up demand.

If Obama would just stay out of the way, this recovery is going to surprise on the upside.

[Swing low, sweet chariot. Comin' for to carry me home.]

1) that's the exact idea of the stimulus - increase demand until the private sector gets back on its feet.  The very thing Hoover failed to do in 1930, when he was still trying to balance the budget.

2) and if you would take the time to read into the leading indicators, instead of focusing on the view in the rearview mirroe, you'll see the private sector is doing all the things it typically does immediately prior to a recovery. 

The truth of the matter, that will be undeniable in the months to come (though, I'm sure you'll still be discounting it, instead of admitting that you're wrong), is:  the private sector is ALREADY in recovery and the government stimulus will only add to its momentum.

Like, I said before.  I'm willing to take any bet with you concerning economics, and where we're headed, jmcfst.  Name the terms. 

Beet pointed out the personal consumption stat and Tender Branson correctly pointed out the inflation-adjusted GDP number, which is the correct measure to be using not the headline number.  I'll give kudos to that.

huh?!  for someone who wants to bet on economics, you seem to know very little about GDP

1)  the 2009Q2 -1.0% number is inflation adjusted, and it's a comparison to 2009Q1. 

2)  The numbers Branson posted are year over year numbers (e.g. 2009Q2 is compared with 2008Q2...2009Q1 is compared with 2008Q1)... in other words, we could have had inflation adjusted growth of around 10% in Q2 and the year over year numbers STILL would have been negative because we still would not have been back to the level of a year ago.

Get it?

[Swing low, sweet chariot. Comin' for to carry me home.]

1) that's the exact idea of the stimulus - increase demand until the private sector gets back on its feet.  The very thing Hoover failed to do in 1930, when he was still trying to balance the budget.

2) and if you would take the time to read into the leading indicators, instead of focusing on the view in the rearview mirroe, you'll see the private sector is doing all the things it typically does immediately prior to a recovery. 

The truth of the matter, that will be undeniable in the months to come (though, I'm sure you'll still be discounting it, instead of admitting that you're wrong), is:  the private sector is ALREADY in recovery and the government stimulus will only add to its momentum.

Like, I said before.  I'm willing to take any bet with you concerning economics, and where we're headed, jmcfst.  Name the terms. 

Beet pointed out the personal consumption stat and Tender Branson correctly pointed out the inflation-adjusted GDP number, which is the correct measure to be using not the headline number.  I'll give kudos to that.

huh?!  for someone who wants to bet on economics, you seem to know very little about GDP

1)  the 2009Q2 -1.0% number is inflation adjusted, and it's a comparison to 2009Q1. 

2)  The numbers Branson posted are year over year numbers (e.g. 2009Q2 is compared with 2008Q2...2009Q1 is compared with 2008Q1)... in other words, we could have had inflation adjusted growth of around 10% in Q2 and the year over year numbers STILL would have been negative because we still would not have been back to the level of a year ago.

Get it?

Sam, to prove my point, here is the title of the table Branson referred to: "Table 8. Real Gross Domestic Product: Percent Change From Quarter One Year Ago--Table Ends"....the headline -1.0% came from this table: "Table 1. Real Gross Domestic Product and Related Measures: Percent Change From Preceding Period"

The "Real" means inflation adjusted.  So BOTH numbers are inflation adjusted.  The -1.0% is comparing 2009Q2 to 2009Q1, and the -3.9% is comparing 2009Q2 to 2008Q2.