Home » Posts tagged 'gdp' (Page 27)
Tag Archives: gdp
Magic Growth Numbers — Paul Craig Roberts – PaulCraigRoberts.org
Magic Growth Numbers — Paul Craig Roberts – PaulCraigRoberts.org.
Everyone wants good news, so the government makes it up. The latest fiction is that US real GDP grew 4.6% in the second quarter and 5% in the third.
Where did this growth come from?
Not from rising real consumer incomes.
Not from rising consumer credit.
Not from rising real retail sales.
Not from the housing sector.
Not from a trade surplus.
The growth came from a Bureau of Economic Analysis survey of consumer spending on services. The BEA found that spending on Obamacare drove the US real GDP growth to 5% in the third quarter. http://www.zerohedge.com/news/2014-12-23/here-reason-surge-q3-gdp
In America, unlike in other countries, a huge chunk of medical spending goes to insurance company profits, not to health care. Another big chunk goes to paperwork, which has a variety of purposes such as collecting personal information on patients and combating fraud (probably the paperwork costs more than fraud). Another chunk goes for tests and procedures in order to justify further procedures. For example, if a doctor thinks a patient’s diagnosis requires a MRI, he must often first order an x-ray to establish that a cheaper procedure does not suffice. If a cancerous skin growth needs to come off, first a biopsy must be done to establish that it is a cancer so that a needless removal is not performed. And, of course, medical practicians must order unnecessary tests in order to protect themselves from the liability of relying on their medical judgment.
You Thought The Saudis Were Kidding? – The Automatic Earth
You Thought The Saudis Were Kidding? – The Automatic Earth.
There are many things I don’t understand these days, and some are undoubtedly due to the limits of my brain power. But at the same time some are not. I’m the kind of person who can no longer believe that anyone would get excited over a 5% American GDP growth number. Not even with any other details thrown in, just simply a print like that. It’s so completely out of left field and out of proportion that you would think by now at least a few more people understand what’s really going on.
And Tyler Durden breaks it down well enough in Here Is The Reason For The “Surge” In Q3 GDP (delayed health-care spending stats make up for 2/3 of the 5%), but still. I would have hoped that more Americans had clued in to the nonsense that has been behind such numbers for many years now. The US has been buying whatever growth politicians can squeeze out of the data and their manipulation, for many years. The entire world has.
The 5% stat is portrayed as being due to increased consumer spending. But most of that is health-care related. And economies don’t grow because people increase spending on not being sick and/or miserable. That’s just an accounting trick. The economy doesn’t get better if we all drive our cars into a tree, even if GDP numbers would say otherwise.
All the MSM headlines about consumer confidence and comfort and all that, it doesn’t square with the 43 million US citizens condemned to living on food stamps. I remember Halloween spending (I know, that’s Q4) was down an atrocious -11%, but the Q3 GDP print was +5%? Why would anyone volunteer to believe that? Do they all feel so bad any sliver of ‘good news’ helps? Are we really that desperate?
Canada’s GDP Stronger Than Expected In October .. Before Oil Prices Collapsed
Canada’s GDP Stronger Than Expected In October .. Before Oil Prices Collapsed.
OTTAWA — Canada’s gross domestic product rose by an unexpectedly strong 0.3 per cent in October, which led several economists to consider revising their estimates for the final quarter of 2014 — although they also warned that they’re less bullish about 2015 due to a drop in commodity prices, especially for oil.
Statistics Canada’s monthly GDP report showed that October’s growth was broad-based, affecting several major sectors of the economy — especially oil and gas extraction, mining and manufacturing. That was partly offset by weakness in agriculture and forestry sector and utilities.
Economists had estimated the Canadian economy would grow by 0.1 per cent during the month, following September’s growth of 0.4 per cent.
CIBC economist Avery Shenfeld wrote that a 0.7 per cent gain in manufacturing was an unexpected contributor and suggested that Canada’s economic growth in the final quarter of 2014 could be better than expected.
“While we don’t see the resource strength lasting into the new year, for now, there’s room for the economy to eclipse our 2.5 per cent Q4 forecast,” Shenfeld wrote in a brief note.
This Is Why the Oil-Price Crash Will Maul the US Economy | Wolf Street
This Is Why the Oil-Price Crash Will Maul the US Economy | Wolf Street.
The plunge in the price of oil that began in July acts like a tax cut, it is said, and will boost spending by consumers and businesses, and thus goose the US economy. Among the voices propagating this view is the UBS macro strategy team. It found that each $10-per-barrel drop in the price of oil would goose US GDP by 0.1%. If the average price in 2015 stays where it is today – down nearly $50 per barrel since June – you can expect a boost to GDP of 0.5%, which would be big for the otherwise crummy US recovery.
I don’t know what these good folks have been smoking, but I want some of it too.
The idea is this: if consumers and businesses spend less on gasoline, heating oil, diesel, jet fuel, and other energy-related products, they would feel like they just got a tax cut and would spend this money thus saved on other things. And somehow this wouldincrease overall spending, and thus GDP.
Alas, the money spent on energy products is already included in GDP either under consumer spending or business spending. Any cut in prices will actually lower GDP by that amount. Now the hope is that consumers and businesses will spend all of this saved money on other things.
Oil price drop means lost billions for Canada, CIBC says – Business – CBC News
Oil price drop means lost billions for Canada, CIBC says – Business – CBC News.
The dramatic decline in oil prices will cost Ottawa about $5 billion in lost revenue and provincial economies a little more than that, one of Canada’s biggest banks suggested today.
That’s one of the main takeaways from a CIBC report that attempts to quantify the impact of plunging oil prices on many aspects of Canada’s economy.
“The recent dive in crude oil prices is an unprecedented development for the Canadian economy,” the report by CIBC economists Avery Shenfeld, Peter Buchanan and Warren Lovely says.
There’s a broad consensus that the declining price of oil is bad economic news for Canada, since the country has made major moves in the last decade or so to increase oil output and become a major global player in energy.
Last week, the Bank of Canada estimated that on the whole, suddenly cheaper oil will knock about a third of a percentage point off of Canada’s GDP next year. But the CIBC report points out that gauging the impact of that decline is far more complex than simply measuring the impact on GDP.
Building the new environmentalism | Ensia
Building the new environmentalism | Ensia.
Forty-four years after the first Earth Day, we must ask a basic question: What is an environmental issue? Air and water pollution, yes. But what if the right answer is that an environmental issue is anything that determines environmental outcomes? Then the definition becomes something much broader, rooted in defining features of our political economy: an unquestioning societywide commitment to economic growth at any cost; a measure of growth, GDP, that includes everything — the good, the bad and the ugly; the ascendancy of money power and corporate power over people power; powerful corporate interests whose overriding objective is to grow by generating profit, including profit from avoiding the environmental costs they create; markets that systematically fail to recognize environmental costs unless corrected by government; government that is subservient to corporate interests and the growth imperative; rampant consumerism spurred endlessly by sophisticated advertising; social injustice and economic insecurity so vast they empower often false claims that needed measures would slow growth, hurt the economy or cost jobs; economic activity now so enormous that its impacts alter the fundamental biophysical operations of the planet.
All of these combine to deliver an ever-growing economy that is undermining the ability of the planet to sustain human and natural communities. That means all of these are environmental issues. Yet very few are addressed by U.S. environmental law, and rarely do they appear on the agendas of mainstream environmental organizations.
…click on the above link to read the rest of the article…
Reframing Progress | Post Growth Institute
Reframing Progress | Post Growth Institute.
“…Progress is one of the most powerful notions in the modern world” writes John Dryzek in
The Politics of the Earth.
I’m inclined to agree with him. Progress acts as a kind of meta-narrative, an incredibly potent and pervasive trope that is woven through stories ancient and contemporary, and forms a core part of our culture. The idea of progress is essentially about things getting better, about the future being better than the past and the present. This hopeful idea, tied up with assumptions about how it will happen, forms our shared story of progress – our progress story. It’s natural that humans should be attracted to a notion like this, as it gives people hope, satisfaction, a sense of achievement and empowerment. What isn’t so natural is the way the idea of progress has become so wedded to the idea of economic growth, fuelled by rampant consumerism.
As this earlier post discusses, growing dissatisfaction with GDP as an entirely misleading and insufficient measure of progress has led to a recent explosion of new indicators, such as theHappy Planet Index, the Genuine Progress Indicator and Gross National Happiness, to name just a few. The groups and individuals behind these ideas are getting the conversation started on what we value, what we consider to be progress, and how best to measure it. This is incredibly important work. But it’s not just official indicators that determine what the progress story is all about. The media forms a very influential gateway between the official statistics and measurements and most ordinary people – meaning it’s the media representation that is directly encountered. I think that the work being done on developing new indicators would be greatly supplemented and reinforced by an effort to reframe and redirect the progress story in terms of the language we use to talk about it and the way it’s represented in the media.
…click on the above link to read the rest of the article…
Are We Reliving The 1930s?
At the close of last week’s G20 Summit, U.K. Prime Minister David Cameron warned that we’re on the verge of another global recession, citing problems like looming deflation, falling prices, and rising protectionist sentiment. This list evokes a sense of déjà vu: not about the Great Recession, but the GreatDepression. That was the last time we ever seriously worried about disinflation, along with every practically other aspect of economic performance raising alarm bells today: low interest rates, weak investment, slow productivity growth, and chronic labor force detachment.
To be sure, this isn’t an easy comparison to swallow. The Great Depression is the ultimate measuring rod of economic catastrophe to which every other downturn is compared. But as time goes by and forecasts of full recovery keep getting deferred like an ever-fading mirage, it’s one worth examining. How does the Great Depression of the 1930s compare with the Great Recession of the 2010s? Let’s look at the GDPs of the U.S., U.K., and continental Western Europe from 1929 on and from 2007 on, using the base year as an index.
It’s official (finally): The US is no longer the world’s #1 economy
It’s official (finally): The US is no longer the world’s #1 economy.
It seems rather appropriate that just seven days after the US government hit a whopping $18 trillion in debt, mainstream financial media has picked up the IMF’s recent World Economic Outlook report, which puts the US economy as #2 in the world.
There’s no shortage of ostriches out there who come up with every reason in the world why this doesn’t matter.
They say, ‘oh the IMF is just reporting purchasing power parity.’ Or, ‘oh it’s the per capita GDP that it counts.’
But the obvious truth is that the US is in decline. And it’s being overtaken.
1,000 years ago when Europe was just a tribal backwater with local warlords duking it out over salt mines, Asia was the center of wealth, power and civilization.
China continued to be the largest economy in the world up through 1870.
A Comprehensive Breakdown of America’s Economic House of Cards | First Rebuttal
A Comprehensive Breakdown of America’s Economic House of Cards | First Rebuttal.
I was going over some of my older posts to review what was being discussed at the beginning of this year and what the perspectives were at that time. I found an interesting piece I wrote at the beginning of the year. I had just watched Janet Yellen’s inaugural panel hearing in front of the congressional finance committee members on Cspan. It’s basically a forum to allow the congressional financial committee members to directly pose comments and questions to the world’s most influential banker, namely, the US Fed chairman.
There were a few hardball questions but mostly just buttering up on Ms. Yellen from both sides of the aisle. Picking out a few of the interesting bits that came up in the course of discussion I was certain I saw a glimpse of honesty indicating that problems are on the horizon, from Ms. Yellen. The most notable commentary was her fairly forthright perspective that the CBO forward guidance depicted an imminent problem for America. What caught me a bit off guard was how easily the congressional finance committee members shrugged off the repetitive warnings from the Fed chair regarding this imminent problem. There was no discussion about possible solutions to the problem or even calls for further investigation to the warnings. It was simply dismissed. I found it incredibly ironic the one person in the world who is mandated to continuously increase leverage to the US was the one warning congress to get its fiscal house in order. Yet the congressional committee before her, acted as though they didn’t hear it.
However, subsequent to that initial committee hearing I’ve not heard any additional warnings from the Fed about getting the America’s fiscal house in order. It was a rare moment of honesty from a rookie chair and she apparently received a memo shortly thereafter informing her of the mistake. Now let’s take a look at specifically what Ms. Yellen was warning congress about. The CBO publishes annual long term forward guidance to give the world an idea of where things will be for the US 25 years out given where we are today. Forecasting so far into the future is no exact science and it relies heavily on assumptions. And so let’s take a look at the typical process.
…click on the above link to read the rest of the article…
Global Business Outlook: “Darkest Picture since Financial Crisis.” US Deterioration “of Greatest Concern” | Wolf Street
The plunging price of oil since June has been a leading indicator: global economic growth is in trouble, despite six years of unprecedented central-bank free-money policies that caused asset prices to soar but has accomplished little else. This scenario has now been confirmed by businesses that help drive the economy forward – not by economists and Wall Street hype mongers: their outlook for the next 12 months has plummeted since June to the worst level since crisis year 2009.
Business leaders are an optimistic bunch. Projecting a 12-month period that is worse than the past 12 months is frowned upon; because business leaders are supposed to make their business grow, even when it looks tough out there. They’ve been optimistic over the years, despite multiple recessions in the Eurozone, a slowdown in China, a quagmire in Japan, and disappointing growth in the US, where “escape velocity,” dangled out in front of our noses for five years, has become a figment of Wall Street imagination. Throughout, business optimism has been fairly strong, according to Markit’s Global Business Outlook, a survey taken in February, June, and October.
But results from the October survey, released today, are a doozie. The number of businesses around the globe that expect activity to rise over the next 12 months exceeded the number expecting a decline by 28%, the worst in the survey history going back to 2009.
…click on the above link to read the rest of the article…
GDP Headed to Permanent Contraction by 2023 – Here’s Why | First Rebuttal
GDP Headed to Permanent Contraction by 2023 – Here’s Why | First Rebuttal.
November 18, 2014—I’d like to carry on the theme from my recent article “Interest Rates Cannot Rise – Here’s Why” that garnered some discussion after being posted on Zerohedge. I’m going to show that GDP is also in a trap of decelerating growth although I will state that unlike interest rates the prognosis is treatable for GDP.
However, it will require the Fed to admit its failure and for the government to pull its Keynesian head out of its aristocratic ass. Specifically, the Fed needs to end its market manipulation and corporate tax rates need to come down significantly in addition to offering incentives for hiring and fixed capital investment here in the US.
Let me start by showing that GDP growth has been decelerating for as long as many of us have been alive. If you can remember back to your calculus classes you’d see deceleration of GDP growth as the second derivative of the GDP function. Let’s see what this looks like in practice on the following chart (the data was exported from St. Louis Fed’s Fred in order to show the trend line).
…click on the above link to read the rest of the article…
Why Japan’s Money Printing Madness Matters | David Stockman’s Contra Corner
Why Japan’s Money Printing Madness Matters | David Stockman’s Contra Corner.
This is getting hard to believe. The announcement that Japan has plunged into a triple dip recession should have been lights out for Abenomics. But, no, its madman prime minister has now called a snap election to enlist more public support for his campaign to destroy what remains of Japan’s economy.
And what’s worse, he’s not likely to be stopped by the electorate or even the leadership of Japan Inc, which presumably should know better. Here’s what Japan leading brokerage had to say about the “unexpected” 1.6% drop in Q3 GDP—- compared to the consensus expectation of a 2.2% gain and after the upward revised shrinkage of 7.3% in Q2.
We think that the economy is gradually improving,” said Tomo Kinoshita, an economist at Nomura Securities. “There’s no reason to be pessimistic about the economy going forward.”
Really? How in the world can an economist perched at the epicenter of Japan Inc. think that its economy is improving when Japan’s constant dollar GDP has now fallen back to pre-Abenomics levels; and, in fact, is no higher than it was in late 2007 prior to the “financial crisis”? Indeed, aside from the Q1 pull-forward of spending to beat the consumption tax increase, Japan’s economy has remained stranded on the flat-line it attained after world trade recovered from its 2008-2009 plunge.
…click on the above link to read the rest of the article…
Is Saudi Arabia Waging Economic Warfare?
Is Saudi Arabia Waging Economic Warfare?.
The G20 is a conference of the world’s top 20 economies as measured by Gross Domestic Product. Some observers have slammed it as an unelected and arbitrary body that is doing some of the work the United Nations was intended to do– only in a much less egalitarian way. The official web site notes.
“The G20 membership comprises a mix of the world’s largest advanced and emerging economies, representing about two-thirds of the world’s population, 85 per cent of global gross domestic product and over 75 per cent of global trade.
The members of the G20 are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States and the European Union.”
Saudi Arabia maintained to journalists that Riyadh is not behind the recent fall in gasoline prices. The suspicion has arisen that Riyadh is “flooding the market,” a technique it has used in the past, of pumping a lot of oil even in the face of weakening market demand, thus driving the price down.
…click on the above link to read the rest of the article…
State Department Hacked, Shuts Down Worldwide Email System | Zero Hedge
State Department Hacked, Shuts Down Worldwide Email System | Zero Hedge.
As the G-20 meeting comes to a ‘successful’ end with back-patting congratulations having agreed to create $2 trillion more GDP out of thin air (or maybe hookers and blow), it appears that someone – or more than one – among these nations was less than diplomatic towards every nations’ best friend – America. As AP reports, The State Department has taken the unprecedented step of shutting down its entire unclassified email system as technicians repair possible damage from a suspected hacker attack. Earlier attacks have been blamed on Russian or Chinese attackers, although their origin has never been publicly confirmed.
The State Department has taken the unprecedented step of shutting down its entire unclassified email system as technicians repair possible damage from a suspected hacker attack.
…click on the above link to read the rest of the article…
