U.S. Economy Expanded at a 2.8% Rate in Third Quarter

[AllentownJake]

Nov. 24 (Bloomberg) -- The U.S. economy expanded at a 2.8 percent annual rate in the third quarter, less than the government reported last month, reflecting a smaller gain in consumer spending and a bigger trade deficit.

The increase in gross domestic product from July through September reported today by the Commerce Department in Washington compares with a 3.5 percent gain previously estimated. Corporate profits climbed by the most in five years.

Smaller increases in spending show the U.S. was dependent on government stimulus programs to help dig the world’s largest economy out of its worst recession since the 1930s. Growing profits lifted purchases of equipment and software, indicating investment by companies such as Verizon Communications Inc. will help make up for smaller gains in household purchases as unemployment mounts.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aJJ.spV04wxY&pos=2

Without Cash for Clunkers and the Homeowner tax credit, this would probably be flat or negative.

Depending on the way you want to look at it, it either shows the programs are working, or that the private sector is still struggling since without government support to two key industries there would have been no growth.

[fasttense]

1. Yeah and the GDP increased from 1933 to 1939, during the1st Republicon Great Depression. n/t

[AllentownJake]

2. No in 1937 it decreased

Of course, FDR started to listen to the GOP and tried to balance the budget before things were back on sound footing...President Obama is much smarter than FDR he's going to go for cuts in federal spending next year lol.

[FBaggins]

3. Why say "probably"?

The data is available.

.81% of that 2.8% was from autos and parts. .45% was from residential fixed investment.

Depending on the way you want to look at it, it either shows the programs are working, or that the private sector is still struggling

No need for "either"... it shows both.

[AllentownJake]

5. On those programs I say it shows nothing

When you put out an incentive to buy a capital asset like a car or a house in bad economic conditions, until you have recovery in employment you are going to run out of people you can give incentives to, to purchase a capital assets.

You can do those types of programs all you want (increase depreciation in the first year, provide a tax credit for purchases, provide a government subsidy) at the end of the day there is a limited pool of people you are targeting in a bad economy. Eventually you need the private sector to pitch in by actually producing himself.

There is a reason why they added another tax credit to the housing situation in December, there are only so many first time home owners out there to buy their first house (or at least people who fit the government description). They added another tax credit for existing homeowners to try to keep it going.

[FBaggins]

13. Was that reply intended for me?

It appears that you make an assumption and then draw conclusions from the assumption as if it were fact. Then when the facts are pointed out to you, you replied by expanding on your conclusions drawn from the original assumptions?

Personal consumption contributed 2.07% of the revised 2.8% GDP growth. .81% of that was from auto purchases (in fact, the "news" from this revision was that auto sales provided much less of a bump than first estimated). There's no way to be certain how much of THAT growth was from government incentives and how much was pent-up demand, but we can be certain that cash-for-clunkers had nothing to do with the .36% contributed by recreational durable goods purchases... or the .11% contributed by furnishings and household goods... or the .47% that went to services.

All I'm saying is not to oversimplify it. There's far more in the report than just a couple of government incentive programs. Some good, some bad.

[AllentownJake]

16. Do you have a link to the report

Love to read it. I'm off to do some work, but I'll take a look at it tonight.

[FBaggins]

17. No problem.

The chart I'm using is on page seven.

http://www.bea.gov/newsreleases/national/gdp/2009/pdf/gdp3q09_2nd.pdf

[AllentownJake]

18. Thank you

believe it or not I do enjoy reading these things.

[FBaggins]

19. There's somethnig very wrong with that.

Of course... I do too. :eyes:

[AllentownJake]

20. Math and economic nerds

Now off to a non-profit to play with an accounting problem.

[optimator]

4. how much contraction is off record

and fuck growth anyway.
what a sick pyramid scheme of a system.

[AllentownJake]

6. Well seeing that last month it was reported that Chinese Manufacturing

is included in our GDP as long as an American Company is doing it and importing it....yeah it is a bad indicator to track.

[HughMoran]

7. I figured this would be exciting news & be posted instantly

I like the post above mine - should change ID to "pessimator" :rofl:

[AllentownJake]

8. Do you have anything to add?

Or are you being snarky which always earns me a shame on you AllentownJake finger shaking.

[HughMoran]

9. No. I was going to comment that you didn't say anything about the 10% existing home sales increase

yesterday, but then did a search and noticed that you had thought about it and found a nice way to spin it negatively after initially stating "good news" in a Prosense thread. You then posted this negative spin - nice! :) http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=433&topic_id=13920

You're OK - I was worried that I hadn't seen any of your posts yesterday, but upon searching I did find that you were able to spin good news into bad - glad you're OK - carry on.

[AllentownJake]

11. I was doing work for a not for profit

About to head there now, had the flu last week so I was a miserable son of a bitch last week.

I actually was pretty consistent in both posts and pretty intellectually honest. In both I said, good news, not great news, don't understand the mortgage application number that goes with it.

I'm sorry asking questions upsets your sensibilities.

[HughMoran]

12. Glad you're feeling better

Asking questions is fantastic! Kudos for doing whatever work you're doing (I'll assume it's good.)

I'm sorry that my pointing out your generally pessimistic spin in everything you post upsets your sensibilities. :P

[AllentownJake]

14. I said Good News

You should be happy you got that much out of me. :hi:

There is a lot of housing inventory out there, housing starts aren't going to happen till it isn't so much cheaper to buy a house built 5 years ago than it is to build a new house.

Increase in sales is good, my only question with the mortgage application question is who are buying the houses? Is is like when retail sales increase but sales tax revenue decreases. Those two numbers should correlate. It is a decent question to ask.

[HughMoran]

21. Believe me - I understand the generally delicate nature of a recovery

The fits and starts - with imbalances that wouldn't exist in a healthy economy - are something to be concerned about. I'm working for a small business that's just barely keeping it's head above water. This is a big opportunity for me because if the economy turns and the products I design make inroads into the market, I could conceivably be a part-owner of this place & hire my own people. One of our biggest issues with attracting good people is not being able to afford healthcare. It actually makes younger unattached candidates more appealing - assuming we think they are "trainable". So, if I seem like I'm rooting for a recovery and healthcare reform, it's because my lifelong dream of controlling my own destiny is directly tied to it. I am the small business engineer/inventor/entrepreneur that you hear about. I'm glad you've found some work to keep you busy for now - I hope it's satisfying.

[AllentownJake]

22. Doesn't pay much and it is part-time

but it gives me something to do other than sit around here and complain

I'm not wishing for bad things. Only saying what I see. I'd rather be full-time somewhere with money.

[Craftsman]

10. So where are the decent paying jobs, no jobs = no recovery

[FBaggins]

15. Many months away

Sorry.