Archive for the ‘GDP’ Category

Captain Rick: U.S. economic growth fell to a snail’s pace during Trump’s first quarter as president. GDP grew at an annualized rate of 0.7% in the first quarter of 2017, down from 2.1% growth in the fourth quarter of 2016.

The deceleration in real GDP in the first quarter was mostly a result of weak personal consumption due to lower auto sales and home-heating bills and a downturn in private inventory investment and in state and local government spending. An upturn in oil drilling and exports and accelerations in both nonresidential and residential fixed investment helped limit the overall GDP deceleration.

GDP Growth Rate in the United States averaged 3.21 percent from 1947 until 2017, reaching an all time high of 16.90 percent in the first quarter of 1950 and a record low of -10 percent in the first quarter of 1958.

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GDP…What is it?

‘GDP’ represents ‘Gross Domestic Product’…a market value of all officially recognized final goods and services produced within a country in a year. GDP performance (increases and decreases) present a broad-based picture of the health of a country’s economy. High GDP growth is typical of a healthy economy. Low GDP growth (below 3%) is typical of an unhealthy economy. Negative growth is typical of an economy in recession. 

GDP Details for Q1 of 2017:

Personal consumption expenditure (PCE) contributed 0.23 percentage points to growth (2.40 percent in the previous quarter) and rose 0.3 percent (3.5 percent in the previous quarter). Spending fell for durable goods (-2.5 percent from 11.4 percent in Q4 2016) and slowed for both nondurable goods (1.5 percent from 3.3 percent) and services (0.4 percent from 2.4 percent).

Fixed investment added 0.69 percentage points to growth (1.47 percentage points in the previous quarter) and increased 4.3 percent, compared to a 9.4 percent expansion in the previous period. By contrast, private inventories subtracted 0.93 percentage points to growth, after contributing 1.01 percentage points in the previous period. Government spending and investment subtracted 0.30 percentage points to growth (0.03 percent in the previous period) and contracted 1.7 percent (0.2 percent in Q4).

Meanwhile, exports jumped 5.8 percent, reversing a 4.5 percent drop in the previous quarter and imports increased at a slower 4.1 percent (9 percent in Q4), bringing the impact from trade to 0.07 percent (-1.82 percent in the previous quarter).

Captain Rick: The U.S. Economy officially tanked big time in the first quarter of 2014…the first slowdown since early 2011. It is a ‘wake-up call’ that America is heading into ‘Recession’ in spite of the ‘it was just a hard winter’ hype that many ‘blind’ economists have been pumping. 

Last month I posted a report showing the US government’s second estimate of GDP dropped to –1% in the first quarter of 2014…a drop from the first estimate in April of a gain of 0.1%. This third and usually final government GDP report shows that the US economy plummeted soundly into ‘recession’ territory during the first quarter of 2014.

The weather had an effect…but perhaps not as much as other factors like the curtailment of ‘Quantitative Easing’ … the pumping of tens of billions of U.S. debt dollars into the economy each month to make the economy look like its doing OK, when in reality, it is not.

This severe drop of GDP into negative territory (–2.9%) is a sign that another recession might be looming.  A recession is generally defined as two consecutive quarters of negative growth. Overall, the U.S. economy continues in limp along in anemic growth…and now negative growth, as shown in the chart below.

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BLUE LINE: 3.0% GDP Growth is required to keep up with U.S. Population Growth. GDP above the blue line represents real growth that adds real jobs. GDP below the blue line indicates real economic decline that is loosing real jobs. GDP below the blue line, but above zero line (‘Recession’), is what Captain Rick calls the ‘Anemic Zone’.

RED LINE: 2.1% GDP Growth is the average of what the U.S. economy scored in the past 12 quarters (3 years). This demonstrates that the U.S. economy is stuck in the economic ‘Anemic Zone’…not mustering enough growth to keep up with population growth. 

GDP…What is it?

‘GDP’ represents ‘Gross Domestic Product’…a market value of all officially recognized final goods and services produced within a country in a year. GDP performance (increases and decreases) present a broad-based picture of the health of a country’s economy. High GDP growth is typical of a healthy economy. Low GDP growth (below 3%) is typical of an unhealthy economy. Negative growth is typical of an economy in recession. 

What does this GDP data mean concerning the future of America?

America is stuck in a land of anemic growth…actually declining in real growth because its economy can not consistently rise above 3% growth … a level required to produce enough jobs and income to keep pace with population growth. In reality, this means that America is declining in economic strength. In the coming few years America faces an astronomical increase in expenditures due to entitlement programs like Social Security, Medicare and welfare programs like Medicaid and Obamacare. America’s relatively level revenue will not be able to cover the mushrooming expenditures. Congress will not be able to address this problem by simply ‘kicking the debt can down the road’ as it has in recent years. At some point soon, the fiscal mess that is brewing will explode as America plunges over the pending ‘real fiscal cliff’.  At the bottom lies America as a third world country.

What can be done to better America and other countries?

Lots can be done! Take notice of what our elected officials do. Vote them out…replace them if they do not perform to your expectations. You might even consider running for an office. The world is in extremely short supply of intelligent people who care about our lands and well being of our people. Go for it. Run for an elected office. Help our world from plunging over the pending ‘real fiscal cliff’…before its too late.

I welcome your comments, likes, shares and following of my blog! (If not visible, click the red title at top)

Interesting ATRIDIM NEWS JOURNAL Links:

Previous GDP Report

GDP

U.S. Debt Crisis

Economy

Captain Rick’s Fiscal Cliff Course 101

Captain Rick: The U.S. Economy took a nose dive in the first quarter of 2014…the first slowdown since early 2011. Some economists are blaming the sudden drop in GDP on the cold and snow in the northeast. The weather had an effect…but perhaps not as much as other factors like the curtailment of ‘Quantitative Easing’ … the pumping of tens of billions of U.S. debt dollars into the economy each month to make the economy look like its doing OK, when it is not. Another alarming factor is the stalling of house sales in America. The current real estate boom might be nearing its peak.

This drop of GDP into negative territory is a sign that another recession might be looming.  A recession is generally defined as two consecutive quarters of negative growth. There is still one more final tweak that will be made to the official GDP number at the end of June. The current –1.0% estimate, a significant drop from the first estimate of .1% last month, could be revised up or down. Overall, the U.S. economy continues in limp along in anemic growth…and now negative growth, as shown in the chart below.

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BLUE LINE: 3.0% GDP Growth is required to keep up with U.S. Population Growth. GDP above the blue line represents real growth that adds real jobs. GDP below the blue line indicates real economic decline that is loosing real jobs. GDP below the blue line, but above zero line (‘Recession’), is what Captain Rick calls the ‘Anemic Zone’.

RED LINE: 2.2% GDP Growth is the average of what the U.S. economy scored in the past 12 quarters (3 years). This demonstrates that the U.S. economy is stuck in the economic ‘Anemic Zone’…not mustering enough growth to keep up with population growth. 

GDP…What is it?

‘GDP’ represents ‘Gross Domestic Product’…a market value of all officially recognized final goods and services produced within a country in a year. GDP performance (increases and decreases) present a broad-based picture of the health of a country’s economy. High GDP growth is typical of a healthy economy. Low GDP growth (below 3%) is typical of an unhealthy economy. Negative growth is typical of an economy in recession. 

What does this GDP data mean concerning the future of America?

America is stuck in a land of anemic growth…actually declining in real growth because its economy can not consistently rise above 3% growth … a level required to produce enough jobs and income to keep pace with population growth. In reality, this means that America is declining in economic strength. In the coming few years America faces an astronomical increase in expenditures due to entitlement programs like Social Security, Medicare and welfare programs like Medicaid and Obamacare. America’s relatively level revenue will not be able to cover the mushrooming expenditures. Congress will not be able to address this problem by simply ‘kicking the debt can down the road’ as it has in recent years. At some point soon, the fiscal mess that is brewing will explode as America plunges over the pending ‘real fiscal cliff’.  At the bottom lies America as a third world country.

What can be done to better America and other countries?

Lots can be done! Take notice of what our elected officials do. Vote them out and replace them if they do not perform to your expectations. You might even consider running for an office. The world is in extremely short supply of intelligent people who care about our lands and well being of our people. Go for it. Run for an elected office. Help our world from plunging over the pending ‘real fiscal cliff’…before its too late.

I welcome your comments, likes, shares and following of my blog! (If not visible, click the red title at top)

Interesting ATRIDIM NEWS JOURNAL Links:

Previous GDP Report

GDP

U.S. Debt Crisis

Economy

Captain Rick’s Fiscal Cliff Course 101

Captain Rick: Final U.S. GDP for Q4 2013 was a disappointing 2.4%, downgraded from the earlier estimate of 3.2%. Early estimates are notoriously optimistic. This GDP figure sounds a wake-up alarm that America is stuck in the GDP ‘Anemic Zone’ … a place between zero real growth and ‘Recession’. 

GDP (Gross National Product) is the broadest means of quantifying the health of an economy. GDP is the monetary value of all the finished goods and services produced within a country’s borders.

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BLUE LINE: 3.0% GDP Growth is required to keep up with U.S. Population Growth. GDP above the blue line represents real growth that adds real jobs. GDP below the blue line indicates real economic decline that is loosing real jobs. GDP below the blue line, but above zero line (‘Recession’), is what Captain Rick calls the ‘Anemic Zone’.

RED LINE: 2.24% GDP Growth is the average of what the U.S. economy scored in the past 8 quarters (2 years). This demonstrates that the U.S. economy is stuck in the economic ‘Anemic Zone’…not mustering enough growth to keep up with population growth. 

What caused the recent GDP decline?

Weakness in the housing sector is a factor. Investment in residential real estate slowed for the first time in three years. I see that as good, as the previous pace was heading rapidly towards another real estate bubble.  Real estate values have peaked and have begun decline in some areas of the U.S., like Gilbert, Arizona that led the value resurgence a few months ago.  

Perhaps the decline in federal QE (debt) spending played the biggest role as a result of the $20 Billion reduction QE (debt) spending per month. The latest GDP decline demonstrates the power that debt spending can have on the economy. If the U.S. were to curtail the remaining $65 Billion in QE debt spending per month, the U.S. might slip into recession. The bottom line is that the U.S. QE debt spending helps the U.S. economy look like its only anemic…when it is actually in recession. This will play out as the Fed is forced to reduce QE debt spending to keep the U.S. from going over the new U.S. Debt Ceiling, recently raised to $17.2 Trillion by the U.S. Congress.

U.S. Fiscal Reality Check

U.S. GDP: $16.1 Trillion

U.S. National Debt: $17.4 Trillion (already exceeds new ceiling), ($55,000 per citizen, $151,000 per tax payer)

U.S. Debt held by foreign countries: $6 Trillion

U.S Federal Spending: $3.5 Trillion

U.S. Federal Revenue: $2.9 Trillion

U.S. Federal Deficit: $0.6 Trillion

Source: USDebtClock.org

What does this GDP data mean concerning the future of America?

America is stuck in a land of anemic growth…actually declining in real growth because its economy can not consistently rise above 3% growth … a level required to produce enough jobs and income to keep pace with population growth. In reality, this means that America is declining in economic strength. In the coming few years America faces an astronomical increase in expenditures due to entitlement programs like Social Security, Medicare and welfare programs like Medicaid and Obamacare. America’s relatively level revenue will not be able to cover the mushrooming expenditures. Congress will not be able to address this problem by simply ‘kicking the debt can down the road’ as it has in recent years. At some point soon, the fiscal mess that is brewing will explode as America plunges over the pending ‘real fiscal cliff’.  At the bottom lies America as a third world country.

I welcome your comments, likes, shares and following of my blog! (If not visible, click the red title at top)

Interesting ATRIDIM NEWS JOURNAL Report Categories:

GDP

U.S. Debt Crisis

Economy

Entitlement Reform

Social Security

Medicare

Medicaid

ObamaCare

Captain Rick’s Fiscal Cliff Course 101

Captain Rick: The 17-nation Eurozone economy contracted for a record sixth consecutive quarter, making this the longest period of recession in the Eurozone’s history. The recession has depressed business confidence, sent unemployment to record highs, inflation to record lows and blown attempts to cut government record debt.

Gross domestic product in the Eurozone fell by 0.2% in the first quarter. The GDP estimate was worse than economists were expecting, largely due to disappointing growth in Germany and could increase pressure on the ECB to take further action to try to stimulate activity.

Unemployment continues to hit new record highs. Unemployment broke through 12% for the first time in March, meaning 19.2 million people were without work in the Eurozone, 1.7 million more than a year ago.
Youth unemployment rose sharply, hitting 24% and leaving 3.6 million people under 25 looking for work.

Prices slumped and inflation has fallen way below the central bank’s target. Inflation posted its biggest monthly drop in four years in April. It fell to 1.2% and touched its lowest level since February 2010.

Eurozone debt hit 8.6 trillion euros, a record 90% of GDP, last year and is forecast to rise to 95% in 2013. As bad as this is … in contrast, U.S. debt to GDP ratio is 107%, trumping it as the worlds worst. One has to wonder if America is next in line to experience the hardships facing those in the Eurozone.

Future Concern: Economists are becoming increasingly concerned at the growing divergence between France and Germany, historically the twin motors of the EU economy and political integration.

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France: French President Francois Hollande (shown above) who was elected a year ago after campaigning to put growth before austerity and introduce higher taxes on the rich, has seen his approval ratings fall sharply as unemployment continues to climb. In recent months he has begun to reform labor markets and pensions, and announced plans to cut capital gains tax. But he is moving too slowly for some, and his government continues to send mixed messages.

France, the Eurozone’s second-biggest economy, slipped back into recession. Its output fell by 0.2% for a second consecutive quarter as it suffered from weak exports and falling investment.  France faces a heavy financial burden from its labor unions and pension systems.

Italy: The pace of contraction eased. GDP shrank by 0.5% in the quarter.
Italy, the region’s third largest economy, nominated a new prime minister. Enrico Letta is a pro-European from Italy’s center-left. He wants Europe to ease up on austerity.

Spain: The recession deepened in the first quarter. The economy contracted by 2% compared with the same period a year ago, and by 0.5% compared with the final quarter of 2012. Spain has been stuck in recession for 21 months. It has been given two more years to bring its budget deficit to below 3% of gross domestic product. In contrast, the U.S. deficit ratio is 6.5% of GDP … more than twice as bad. One has to wonder if America is next in line to experience the hardships facing those in the Eurozone.

The number of unemployed in Spain broke the 6 million barrier during the first quarter, a new record. The unemployment rate rose to 27.2%, tied with Greece for the Eurozone’s highest. For Spaniards aged 16 to 24, the unemployment rate is 57.2%.

Greece: The jobless rate was 27.2% for January, tied with Spain for the Eurozone’s highest. In Greece, 34.2% individuals aged 25 to 34 are unemployed. It’s even worse for younger workers — 59.3% of Greeks aged 15 to 24 are out of work.

Portugal: Portugal was able to slow the pace of contraction to 0.3% from 1.8% in the fourth quarter.

I welcome your comments, likes, shares and following of my blog! (If not visible, click the red title above)

Info from previous reports:

European Debt Crisis: https://atridim.wordpress.com/category/european-debt-crisis/

Europe: https://atridim.wordpress.com/category/europe/

France: https://atridim.wordpress.com/category/france/

Germany: https://atridim.wordpress.com/category/germany/

Greece: https://atridim.wordpress.com/category/greece/

Italy: https://atridim.wordpress.com/category/italy/

Portugal: https://atridim.wordpress.com/category/portugal/

Spain: https://atridim.wordpress.com/category/spain/

Home page (all reports): https://atridim.wordpress.com/

Captain Rick: Gross domestic product in China grew 7.7% over the previous year during the first quarter. That is great by U.S. standards, which are hovering near 0%, but a significant loss from the 10% annual GDP that China has averaged during the past three decades, which propelled it to become the the world’s second largest economy. Reports on industrial production and retail sales disappointed. Economists are worried about a rapid expansion in credit and a red-hot housing market.

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Fitch ratings agency warned China of excessive debt levels and issued rare local currency downgrade
The ratings agency said it issued the rare downgrade because of three factors: Structural weaknesses in China’s economy, an expansion of easy credit and the rise of an opaque shadow banking system.
Credit in China has expanded quickly in the wake of the global financial crisis, with much of it issued to local governments and used to finance infrastructure projects.
Fitch believes local government debt levels are now so high that Beijing will, at some point, be forced to assume some of the burden.

In response to the global financial crisis in 2008, China moved to stimulate its economy by increasing the amount of available credit.
Banks and other lenders responded, with credit in China growing since 2009 at a quicker pace than gross domestic product. Only one country — Qatar — was issuing credit at a faster rate.
By the end of 2012, credit issued by Chinese banks to the private sector reached 136% of GDP, the third-highest level of any emerging market country rated by Fitch.
Much of the credit was issued to local governments, and used to finance infrastructure projects that helped China sustain rapid economic growth in the wake of the financial crisis.

Beijing has tried to get a handle on credit issuance in recent years, moving to cool the housing market and cut back on local government debt.
But when combined with low wages, Fitch said the persistent nature of the trends has created growing risks for China’s financial stability.

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Real Estate Bubble heating up and ripe for explosion

The housing market is heating up, leading some analysts to worry about the development — and possible deflation — of a housing bubble.
China’s central government is already stepping up efforts to cool prices, and Beijing has directed local governments to institute control measures of their own.
Several cities, including Beijing and Shanghai, have responded by announcing higher taxes and fresh restrictions on property purchases.
20% capitol gains tax has been added on home sales as well as higher interest rates and down payments for anyone buying a second home in cities where real estate prices are sharply on the rise.

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China is the second largest holder of U.S. debt (Japan is the largest)
China held about $1.15 trillion in U.S. bonds through August, the most recent reading available from the Treasury Department.
China had been buying U.S. Treasuries as a way to keep its currency, the yuan, pegged to the U.S. dollar. That helped lower the value of the yuan and made China’s exports more competitive in markets such as the United States.

Captain Rick’s Words of Caution: Notice I said China ‘had been buying U.S. Treasuries.’ Latest indication is that that has stopped. This could have grave consequences on Americas gigantic thirst for deficit spending. Japan remains the only major purchaser of American debt and those days could be numbered as well due to economic conditions in Japan not being anything to ‘write home about’. Our world is skating on very thin ‘fiscal ice’. Countries of our world, including China, depend on America to be a leader of fiscal responsibility. America has not been setting a very good example with its legislative gridlock on solving its monumental thirst for deficit spending. The world can only hope that America will wake up from its deep sleep and do what is necessary, before its speeding train goes over the ultimate ‘fiscal cliff’ and takes the world with it.

I welcome your comments, likes, shares and following of my blog! (If not visible, click the red title above)

Info from previous reports:

China: https://atridim.wordpress.com/category/china/

Fiscal Cliff: https://atridim.wordpress.com/category/fiscal-cliff-course-101/

U.S. Debt Crisis: https://atridim.wordpress.com/category/u-s-debt-crisis/

GDP: https://atridim.wordpress.com/category/gdp/

Captain Rick: The U.S. managed to crawl out of the GDP recession zone in its ‘final’ report for Q4 2012 to post a dismal 0.4% GDP, second worst since the end of the Great Recession in 2009. The first estimate in January reported –0.1% GDP, in the recession zone. 

GDP (Gross National Product) is the broadest means of quantifying the health of an economy.

In my previous GDP report, I stated: “If Congress gets tough and addresses the debt crisis head on, I suspect it will present a deeper, temporary plunge into negative growth territory. If Congress continues to ‘kick the can down the road’, I suspect we will see less of a dive in GDP early on…but will set the stage for a much deeper dive in a year or two…possibly as deep or deeper than the ‘Great Recession’ of 2008-2009”.

The U.S. Congress passed and President Obama signed legislation to “kick the debt can down the road” AGAIN as reported in my previous post. While these actions have no effect on GDP for Q4 2012, they will effect GDP for Q1 2013 and beyond.

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The red line in the chart above indicates the 3% level that the U.S. GDP must maintain to keep up with population growth. GDP has been far short of that for many years. In spite of the positive hype we are hearing in the mainstream news media, America is traversing extremely dangerous economic waters. Hype does not fix problems… credible action does. Unfortunately the world is seeing ‘zero’ credible action out of the politicians who represent the citizens of the United States of America.

Prognosis for the future…where are we headed?

I see several troubling economic factors that parallel the times leading up to the ‘Great Recession’. The world stock markets have reached a new high, passing those reached just prior to the stock market crash of 2008. Like then, I see no justifiable reason for the market rise. Today’s market reminds me of a bunch of gamblers in Vegas looking for a place to throw all of their dollars to bet it all. The market is again inflating into a balloon ripe for explosion. Real estate prices have been climbing at a fast pace, as is real estate speculation…similar to that witnessed prior to the bursting of the real estate bubble, prior to the Great Recession. I can not predict how much farther things can go before a repeat of 2008 occurs…or perhaps worse, but I feel that a down slide is coming soon. Much will have to do with congress’s handling of the debt crisis (very dismal at this point). It will be further complicated by the multi-trillion dollar cost of Obamacare (the worlds greatest socialized, welfare medical program). In addition, we must remember that multi millions of baby boomers are beginning to collect Social Security from a trust fund that has been totally robbed of funds to finance the U.S. Government and its politician’s thirst for deficit spending. It will all play out in a very ugly scene before the world’s eyes during the next few years.

I welcome your comments, likes and shares!

Info from previous reports:

Fiscal Cliff: https://atridim.wordpress.com/category/fiscal-cliff-course-101/

U.S. Debt Crisis: https://atridim.wordpress.com/category/u-s-debt-crisis/

GDP: https://atridim.wordpress.com/category/gdp/