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Gross Domestic Product,1st Quarter, 2014
The Commerce Department's Bureau of Economic Analysis announced Wednesday that the economy grew at a paltry, seasonally adjusted annual rate of 0.1 percent in the first quarter of 2014. This tied with the worst economic performance since the economic "recovery" began in the summer of 2009. A consensus of analysts surveyed by the Wall Street Journal had predicted a slowdown in growth to 1.1 percent. Real GDP per capita came in even lower at -0.64 percent, the lowest level since the first quarter of 2011.

Nelson D. Schwartz reports:

Even if growth does pick up later this year, the rate will still most likely be below the postwar average of just over 3 percent, said Dan North, chief economist at Euler Hermes North America, a larger insurer.

“We’ve been living in sub-3 percent land, and people have gotten used to that as the new normal,” Mr. North said in an interview before the Commerce Department announcement. “But it’s not. It’s anemic.”

This is the first of what will be three government estimates of real—that is, inflation-adjusted—gross domestic product between now and the end of June. The first estimate is always based on incomplete data, and the next two monthly reports for the same quarter could show significant differences from Wednesday's as better information about the economy's performance becomes available.

GDP is a flawed gauge of the economy, but it is the only measure of the total output of goods and services. More on that in a moment.

Please read below the fold for more analysis.

The steep fall in growth was chalked up to lower exports, reduced levels of non-residential fixed investment, a decrease in private inventory investment, a deceleration of personal consumption expenditures and less spending by state and local governments. Federal spending rose and the United States imported fewer goods.

One key measure within the GDP gauge is real final sales of domestic product. That is, inflation-adjusted GDP minus the change in private inventories. Real final sales increased 0.7 percent in the first quarter, compared with an increase of 2.7 percent in the fourth.

Real personal consumption expenditures increased 3.0 percent in the first quarter, compared with an increase of 3.3 percent in the fourth. Durable goods increased 0.8 percent, compared with an increase of 2.8 percent. Nondurable goods increased 0.1 percent, compared with an increase of 2.9 percent. Services increased 4.4 percent, compared with an increase of 3.5 percent.
Some analysts said the underlying economic situation is better than the GDP numbers indicate. One figure spurring their thoughts in that direction was the first-quarter's estimated increase in personal consumption expenditures—consumer spending—which clocked in at 3 percent. But PCE has been outpacing increases in wages. Which means consumers are spending from their savings or at least saving less. That's something that cannot be long sustained.

Jared Bernstein, now a senior fellow at the Center on Budget and Policy Priorities and previously chief economist and economic adviser for Vice President Joe Biden, wrote on his blog:

Remember, that 0.1% is an annualized number–the actual, quarterly percent growth of GDP was 0.03%, meaning that the real level of the value of goods and services in the US economy was essentially unchanged in the first three months of the year. That’s unusual and alarming, if it’s correct.

As noted, there’s a lot of preliminary data in here and one bad report doesn’t immediately shift the longer term trend, as per the year/year rates cited above. But I and others have consistently warned about seeing “green shoots” before their time, and this GDP report is a reminder of the important caveat. As much as we’d like it to be otherwise, the US economy is clearly not yet out of the sloggy-growth woods.

As I always point out, because of the flaws in the way it measures economic activity, it is important to use the GDP in conjunction with other economic factors when measuring the economy's health. Robert F. Kennedy's assessment in 1968 still resonates:
"Too much and for too long, we seemed to have surrendered personal excellence and community values in the mere accumulation of material things. Our Gross National Product, now, is over $800 billion dollars a year, but that Gross National Product - if we judge the United States of America by that - that Gross National Product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities. It counts Whitman's rifle and Speck's knife, and the television programs which glorify violence in order to sell toys to our children. Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile. And it can tell us everything about America except why we are proud that we are Americans."
Inadequacies in the GDP gauge have spurred efforts to develop a better measure or supplements to it. These include France's Commission on the Measurement of Economic Performance and Social Progress, Canada's Genuine Progress Index (a version of which has recently been tried out in Maryland), the Human Development Index and the Gini coefficient.

Originally posted to Daily Kos Economics on Wed Apr 30, 2014 at 08:42 AM PDT.

Also republished by Daily Kos.

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Comment Preferences

  •  thanks for mentioning the Gini coefficient (18+ / 0-)

    since it can measure income/wealth inequality

    Although the Gini coefficient is most popular in economics, it can in theory be applied in any field of science that studies a distribution. For example, in ecology the Gini coefficient has been used as a measure of biodiversity, where the cumulative proportion of species is plotted against cumulative proportion of individuals. In health, it has been used as a measure of the inequality of health related quality of life in a population. In education, it has been used as a measure of the inequality of universities.

    Warning - some snark may be above‽ (-9.50; -7.03)‽ eState4Column5©2013 "I’m not the strapping young Muslim socialist that I used to be" - Barack Obama 04/27/2013 (@eState4Column5).

    by annieli on Wed Apr 30, 2014 at 08:47:01 AM PDT

  •  Gee (27+ / 0-)

    I wonder if the expiration of unemployment benefits might have had something to do with the deceleration in personal consumption.

    Nah.

    •  Polar Vortex: Global Cooling (5+ / 0-)

      Highlighting the imperative of accelerating our extraction of fossil carbon.

      We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

      by Gooserock on Wed Apr 30, 2014 at 09:00:57 AM PDT

      [ Parent ]

      •  Obamacare saved the day for Q1 GDP!! (12+ / 0-)
        •  Wow. Healthcare (6+ / 0-)

          has been driving the US economy for more than a decade now.  We need something else very very badly.

          From Neocon to sane- thanks to Obama- and Kos.

          by satrap on Wed Apr 30, 2014 at 09:09:34 AM PDT

          [ Parent ]

          •  And the millions who signed in March/April (7+ / 0-)

            will start using their insurance on May 1.

            Expect healthcare spending to be a huge, huge component of 2014 GDP.

            Millions have been putting off surgeries and other care for years due to lack of insurance. The pent up demand will be the driver of GDP for 2014 and even 2015 and 2016 as more people get insured.

            •  Hey, maybe we can mandate market participation (4+ / 0-)

              in other vital areas as well.

              We could have mandated purchasing of agribusiness products. We could have mandated purchasing of bottled or filtered water.

              Just think of all the GDP we could raise if we mandated market participation in vital areas of human need. It would be a real bonanza.

              /snark - at least I hope it is. Your argument scares the shit out of me, and it's a slippery slope argument that I made back in 2011 when I first heard of the plan to push the ACA without a public option.

              Not at all a fan of mandated market participation for the health of industry or the health of key national markets.

              Democracy - 1 person 1 vote. Free Markets - More dollars more power.

              by k9disc on Wed Apr 30, 2014 at 09:26:36 AM PDT

              [ Parent ]

            •  I would have thought the same thing... (2+ / 0-)
              Recommended by:
              Shaylors Provence, RFK Lives

              I really thought that the ACA would be a big help with the economy and would help to bail out some of the hospitals that were providing primary care via emergency room. Then I actually saw what many of the most popular policies provided. For far too many of them, the deductibles are simply huge. I don't think they will help the situation for any major health problems or emergency room reimbursements much at all. People will get their 0 deductible wellness care and a few other things, but any real medical help has these huge deductibles. I really was a bit clueless at first in my support for the ACA, but I really don't see how it is going to help things to the extent I first had hoped.

              Hey...I've got insurance!!!!!!...but I can't use it till I go bankrupt!!! This really did catch me by surprise.

          •  Health care is very bad as GDP (7+ / 0-)

            If you break your arm and a doctor fixes it, that's GDP.

            If you never break your arm, that's not GDP.

            This trivial fact shows that increased health care costs as % of GDP is generally bad, all things being equal.

            Granted, some increased health costs could be represented by people being covered who would not otherwise have been, or advanced cures that would otherwise not have been available.

            But generally, more health care as a percent of GDP is bad. You'd rather spend your GDP making goods and services of real net positive value, not fixing broken stuff.

            (-5.50,-6.67): Left Libertarian
            Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

            by Sparhawk on Wed Apr 30, 2014 at 09:28:45 AM PDT

            [ Parent ]

            •  depends... (6+ / 0-)
              Recommended by:
              Aquarius40, satrap, Spit, Inland, nchristine, jbsoul

              You're leaving out the third possibility: You break your arm and nobody fixes it.

              At this moment I need to call my friend back to see how his appointment with the orthopedist went yesterday. 6 weeks ago his right (dominant) hand was crushed by falling concrete blocks; not at work, so not covered by workers' comp. We live in GA and he's a childless adult, so no Medicaid. Income was already too low to get an Obamacare subsidy (under 100% of poverty, no subsidy, exempt from mandate). ER put him in a splint and told him to see an orthopedist, who wanted $200, which he did not have.

              As of now he has essentially zero use of dominant right hand, which means he has not been able to work in 6 weeks. Not able to work, so no unemployment benefits. Physical therapy may restore some use. If not for my church, he'd be homeless and getting no medical treatment.

              That's life in red-state USA.

              "The true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals." - Barack Obama

              by HeyMikey on Wed Apr 30, 2014 at 10:09:53 AM PDT

              [ Parent ]

        •  Wow (2+ / 0-)
          Recommended by:
          HeyMikey, Spit

          Talk about a Rorschach test made of data.

        •  I live in a county (0+ / 0-)

          that provides much of the healthcare resources for several surrounding counties, doctors, specialists, diagnostic services such as MRI's, and the largest hospital.  Our county was one of three with unemployment below the national average last year, because of that medical community.  

          Things would be even better if the Governor had not decided to put politics ahead of saving people's lives and expanded medicaid.

    •  There are several factors (6+ / 0-)

      Such as:
      1) international factors, such as the recession in Europe and the credit crunch in China, are crushing international trade
      2) the investor-led housing boom since 2012 has played itself out

        Just to name a few. But the unemployment thing I'm sure factors in.

      "The oppressors most powerful weapon is the mind of the oppressed." - Stephen Biko

      by gjohnsit on Wed Apr 30, 2014 at 09:09:31 AM PDT

      [ Parent ]

      •  Afraid you cannot use that excuse (1+ / 0-)
        Recommended by:
        AlexDrew

        Europe is coming out of recession. Look at this in relation to some of the other GDP figures announced in the last couple of days for Q1 2014.

        Spain's economy grew at its fastest quarterly pace since 2008 during the first three months of the year, according to the country's National Statistics Institute.

        Gross domestic product (GDP) rose by 0.4% in the January to March period, the data showed. Compared with a year earlier, Spain's economy grew by 0.6%, the fastest pace in three years.

        http://www.bbc.co.uk/...

        The UK hit an important milestone in recovery with GDP now almost back at the pre-crisis level (as the USA and Germany have already achieved). A lot of this is from increased output due to a larger working population caused by migration from other EU countries so GDP per worker is not yet back at the same level. However:

        The Office for National Statistics said on Tuesday that GDP expanded by 0.8% in the first quarter after 0.7% growth in the final three months of last year. That was below economists' forecast of 0.9%, according to the consensus in a Reuters poll.

        The year-on-year growth rate was 3.1%, the fastest in six years, but again below forecasts for 3.2% growth. The economy is still smaller than it was before the recession hit in 2008 but analysts said it was now on track to make up all the lost ground by the middle of this year.

        "Today's GDP numbers were a little disappointing, though we would not be surprised to see it revised higher," said John Bulford at the thinktank Oxford Economics. "There is still plenty of good news to take away from today's numbers, and we are sticking to our view that the economy will expand by 3% in 2014 as a whole, with GDP overtaking its pre-crisis peak in the next quarter."

        http://www.theguardian.com/...

        There is some evidence that the adverse weather might have reduced output in the USA however the same can be said of the UK which has had large areas affected by heavy rains, storms and flooding - caused by the same changes to the jet stream that caused the cold in the USA.  If I can point to a few differences:

        1. Tax cuts for personal income tax have benefitted the poorest workers by raising the income at which the 30% basic rate starts to be paid but not increasing the starting point for the higher rate of 40%.  Top rate has also been reduced from 50% to 45% however the cash take has apparently increased as there are fewer incentives to avoid this tax.

        2. There have been cuts to public expenditure and reductions in the numbers working for the national and local governments however education and the NHS have been protected in real terms and foreign aid ringfenced at 0.7% of GDP. There have been considerable reductions in both the staff and equipment expenditure for the military.

        3. Throughout spending on major capital infrastructure investments have been maintained. These include, for example, Crossrail in London which is currently the largest building project in Europe (It is a new east-west railway through central London which links to existing lines outside that area). The paving bill for HS2 (a high speed rail line from London to Birmingham with plans to extend further north) have just survived a "NIMBY" challenge although final approval of the project will be after the May 2015 elections.

        "Come to Sochi, visit the gay clubs and play with the bears" - NOT a Russian advertising slogan.

        by Lib Dem FoP on Wed Apr 30, 2014 at 10:33:57 AM PDT

        [ Parent ]

        •  Expect a revision (1+ / 0-)
          Recommended by:
          virginislandsguy

          Weather was historically bad in the upper Midwest.  I mean, you could barely survive this winter, let alone work.

          Everything I'm seeing on the ground right now is about hiring new employees, contractors booked solid, spending up, foot traffic up.  This is as strong as the economy has been since the blowout in 2008.

          Sure, that's anecdotal, but in our area it's widespread and incontrovertible.  The economy is humming along just fine out here, one hour from the Twin Cities.

          Industrial food production in America ruins our health, our environment and consumes more fossil fuel than any segment of our economy.

          by Mi Corazon on Wed Apr 30, 2014 at 10:44:11 AM PDT

          [ Parent ]

          •  I hope, then, (1+ / 0-)
            Recommended by:
            jbsoul

            that that economy humming along in your area means workers across the income spectrum are receiving pay increases that outstrip the government's questionable measure of inflation as well as resuming contributions to workers' retirement plans.

            While the simple fact that people have work is a great thing, saying that the economy in a region is "just fine" when, in reality, it's just barely treading water isn't something necessarily to cheer.

          •  And taken into account surely? (1+ / 0-)
            Recommended by:
            gjohnsit

            Preliminary figures are always revised however do not expect any drastic revisions unless you believe the US has such faulty statistical reporting processes that a major error has been made. Any revision is unlikely to be more that +/- 0.1%.

            This can have significant effects, for example in the case of the UK the preliminary figures for late 2012 suggested a "triple dip" recession through a small upward revision that took it out of the technical definition of recession (two successive quarters of negative growth). While in itself minor, there was an effect on the markets which boosted later growth, again slightly but significantly.

            "Come to Sochi, visit the gay clubs and play with the bears" - NOT a Russian advertising slogan.

            by Lib Dem FoP on Wed Apr 30, 2014 at 10:53:39 AM PDT

            [ Parent ]

            •  Come now (0+ / 0-)
              For 1983–2012, the average revision (without regard to sign) between the second estimate and the third estimate is 0.3 percentage point.
              I got that from a discussion of the 4th quarter 2013 3rd estimate on bea.gov.  It stands to reason that the first to second estimate average change is even bigger, but I am having trouble finding a record of the revisions.   Just because initial numbers have an error doesn't mean it's a faulty statistical reporting process.  The jobs numbers due out tomorrow have an error bar of 100k jobs; are they faulty?

              Given the jobs numbers for January and February, a weak GDP number is perhaps not unexpected, but I still expect this number to revised up.  But who knows.

    •  Not to mention... (9+ / 0-)

      The reduction in SNAP.  Broke people, by definition, spend no money.

      “Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.” - John Steinbeck (Disputed)

      by RichM on Wed Apr 30, 2014 at 09:33:40 AM PDT

      [ Parent ]

      •  I was just going to mention food stamps (0+ / 0-)

        I remembered reading somewhere that Walmart is concerned that sales are down because of reduced SNAP (food stamp) benefits. I just googled it and here's one of many links: Wal-Mart relies on food stamps for profit.

        I don't especially like WalMart (never shop there), but if reduced SNAP benefits are affecting WalMart, I'm sure other grocery stores are suffering, too.

        "Stupid just can't keep its mouth shut." -- SweetAuntFanny's grandmother.

        by Dbug on Wed Apr 30, 2014 at 08:19:43 PM PDT

        [ Parent ]

  •  The horrible weather in many parts of the (15+ / 0-)

    country certainly played a role, but we will not see real economic growth as long as so much of the national wealth is in the hands of the .01%. Measures that will put money into the hands of folks who will spend it--increasing the minimum wage, extending unemployment benefits, etc.--will lead to real economic growth. Tax the rich and put the money into improvements in infrastructure. Of course, this will never happen. Instead we move further down the road to oligarchy.

    •  I was thinking that too. The harsh winter. (3+ / 0-)
      Recommended by:
      satrap, Eric Nelson, blue jersey mom

      It certainly kicked my ass.  It got to the point where I just went to work and went home. (and shoveled snow and scraped ice and shoveled snow)  Other than gas and groceries I didn't buy anything.
      My brother, who was looking to buy a new, car told me he wasn't going to test drive anything until the roads were clear and salt free.
      That has to have played out millions of times all across the country.

      Love my work. Hate my job.

      by DuzT on Wed Apr 30, 2014 at 09:37:30 AM PDT

      [ Parent ]

      •  Probably plays some role (2+ / 0-)
        Recommended by:
        Shaylors Provence, AlexDrew

        but it ignores the entire west of the US, which was not freezing. In fact, it was pretty warm out here for most of Q1. And CA alone is more than 1/10th of US GDP.

        I could see a lower number than otherwise, of course, and in fact they were predicting one based on the harsh weather in the eastern half of the country already, so far as I know. Expectations were for 1.2%, IIRC, counting weather related effects.

        0.1% is just a really terrible number. A lot of it is a downturn in exports and investment -- not just residential investment, either. Personal consumption is positive, but a significant chunk of that is heating bills and health care spending.

        I mean, we could be on an upswing again already, I don't make big predictions much, I have zip investments (I don't consider my home an "investment," fundamentally,) and everything I glance at for a sense of the economy is sort of mixed-weird-flaky lately. But I've also been amused reading through all of the spin in the media this morning, all dancing around what looks to just genuinely be a pretty awful piece of data.

    •  Our neoliberals have that covered. (0+ / 0-)

      Change all the Interstates to toll roads for infrastructure repairs.

  •  It's a "recovery!" Oh, wait! It's the "R-word!" (19+ / 0-)

    One of the most pathetic truths of this election year manifesting itself in "Party Guidance"...

    Advice to Democrats: Don't say 'recovery'
    By DAVID ESPO
    AP
    April 18, 2014

    WASHINGTON (AP) — Election-year memo to Democratic candidates: Don't talk about the economic recovery. It's a political loser.

    So say Democratic strategists in a blunt declaration that such talk skips over "how much trouble people are in, and doesn't convince them that policymakers really understand or are even focusing on the problems they continue to face."

    In addition, Stan Greenberg, James Carville and others wrote that in head-to-head polling tests the mere mention of the word "recovery" is trumped by a Republican assertion that the Obama administration has had six years to get the economy moving and its policies haven't worked.

    Coincidentally or not, Democrats have largely shelved the "R'' word...

    Six years after being trolled, taunted and abused--even in this community--the REALITY spoken by the Democratic Wing of the Democratic Party comes home to roost!

    April 30th, 2014 Memo to Some Kossacks: Spin is NOT reality. The public's SICK of spin. And, they have been for a VERY long time.

    "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

    by bobswern on Wed Apr 30, 2014 at 09:01:58 AM PDT

    •  I think the recent interest in bank fraud is an (5+ / 0-)

      interesting move.

      Going after some foreign fish to turn into a little populist red meat for those who are easily sated with gruel.

      I read the piece here on that movement to hold banksters accountable, not very impressed, but I'm sure it will be trumpeted as the greatest round up of white collar criminals in our lifetime.

      meh...

      Democracy - 1 person 1 vote. Free Markets - More dollars more power.

      by k9disc on Wed Apr 30, 2014 at 09:29:39 AM PDT

      [ Parent ]

    •  How 'bout we say "Slowdown due to EU business (3+ / 0-)
      Recommended by:
      NoMoreLies, bobswern, Eric Nelson

      exiting US tech firms that promised to protect privacy, but didn't." If we had a liberal media, that's what it would spin.

      I have a ready-to-go "recovery" diary with charts and graphs that I shelved. Even though the BLS number of consecutive months with private sector job growth surpassed the record of the previous administration, "recovery" is a dirty word. More consecutive months and more jobs added in those months don't translate into the warm fuzzies the public felt as the housing bubble was topping out in 2006. Somehow, things are worse now.

      Even the income inequality metrics were a bit worse just before the recession than they are now but few people in the mainstream talked about it then. It's a popular topic now.  

      I guess what I'm saying is that even liberals don't want to jump on the recovery bandwagon.

    •  Don't throw that pie quite yet, bob: (1+ / 0-)
      Recommended by:
      virginislandsguy

      While you decry "spin", the fact is your cheering it.  The pollers say that using the word "recovery", although true, "skips over" how much trouble people are in even as the country is in a recovery.

      That's a little different that your declaration that we had a double dip recession (which wasn't true) or your declaration that there has been no recovery (also not true).  It's a warning to pols that these categories aren't a substitute for food on the table.  But neither is your pie.

      The dossier on my DKos activities during the Bush administration will be presented on February 3, 2014, with an appendix consisting an adjudication, dated "a long time ago", that I am Wrong.

      by Inland on Wed Apr 30, 2014 at 10:37:26 AM PDT

      [ Parent ]

      •  It also means (4+ / 0-)
        Recommended by:
        jbob, Spit, Don midwest, TheMomCat

        that the typical definitions of "recovery" and "recession" aren't adequate for describing the economy.

        "The oppressors most powerful weapon is the mind of the oppressed." - Stephen Biko

        by gjohnsit on Wed Apr 30, 2014 at 11:09:55 AM PDT

        [ Parent ]

        •  Nooooo....... (2+ / 0-)
          Recommended by:
          Spit, AlexDrew

          it means "recession" and "recovery" don't contain every aspect of the economy.   They are still useful terms, though, and anyone who doesn't want to use them by their "typical definitions" and not mislead anybody will invent a new one.

          The dossier on my DKos activities during the Bush administration will be presented on February 3, 2014, with an appendix consisting an adjudication, dated "a long time ago", that I am Wrong.

          by Inland on Wed Apr 30, 2014 at 11:20:45 AM PDT

          [ Parent ]

          •  I agree with you both (1+ / 0-)
            Recommended by:
            jbsoul

            No one set of terms can contain every aspect. But simultaneously, the terms as used within the context of economics are more than a little strange to the many, many people who view them through a lens of experienced economic conditions.

            The poor and most of the middle class -- in other words, most people -- are not experiencing what most of us think of as "a recovery," though of course the economy as a whole is in overall positive territory. "Recovery" in more common usage does carry implications that things are all better, though of course that's not necessarily true in the technical economic sense of the word.

            I agree with you that simply mangling the technical meanings specifically to mislead is really not a good thing to do.

            I also think that the words become kind of meaningless for many purposes when a "recovery" can still involve zero or negative real wage growth (or standard of living, or so on) for most of the people to whom that economy applies. At some point, a healthy economy would, I would think, be expected to reflect that "recovery" in more breadth.

          •  What it means is that "recession" and "recovery" (0+ / 0-)

            are technical terms of art. They would be of little to no significance to ordinary human beings, even if they hadn't been carefully designed in order to enable politicians and bureaucrats to deceive the public about the real state of things. As it is, they are inherently deceptive, and shouldn't generally be used at all, by anybody, anywhere, in any context other than a discussion of the disingenuousness of government language.

            To put the torture behind us is, inevitably, to put it in front of us.

            by UntimelyRippd on Thu May 01, 2014 at 11:22:36 AM PDT

            [ Parent ]

        •  I don't know (0+ / 0-)

          Since January 2010 we have added 8.8 million private sector jobs.  I would call that recovery.  While, total private jobs vs pre-recession are about even, the unfortunate reality is that a lot of the jobs lost in the recession were the result of the bubble in credit/housing from the Bush economy and thus not "real" in the first place.  

          At some point we (as the reality based community) need to admit that demographics are playing a huge role in the current state of the economy and just like Japan and Europe before us, we should expect lower growth rates as the population ages and slows in growth.

          •  At some point (5+ / 0-)

            economists (and economically incline people) need to stop thinking that the public is a bunch of morons.
              If people say they are struggling then maybe they are indeed struggling, despite the fact that the headline economic numbers say they are doing great.

            "The oppressors most powerful weapon is the mind of the oppressed." - Stephen Biko

            by gjohnsit on Wed Apr 30, 2014 at 11:29:08 AM PDT

            [ Parent ]

            •  I never said people aren't struggling (0+ / 0-)

              but that doesn't change the reality that 2.5% growth may be about the best we can bank on for a while.  Nor does it change the fact that those 8.8 million jobs have been created.  

              We have more than enough growth/GDP to have a strong middle class/economy, its just that many aren't benefiting from it.

              •  I wasn't accusing you of anything (2+ / 0-)
                Recommended by:
                Shaylors Provence, bobswern

                I'm just saying that too many people fall in love with their numbers and theories and forget that the field of economics is no more science than psychology is.

                  The fact that modern economics completely ignores the issue of class is really telling. And probably the reason why modern economists are missing a clue.

                "The oppressors most powerful weapon is the mind of the oppressed." - Stephen Biko

                by gjohnsit on Wed Apr 30, 2014 at 12:01:37 PM PDT

                [ Parent ]

                •  But you make economic predictions. (0+ / 0-)

                  How can you have the confidence to predict a recession this year or first half of 2015 while poo-pooing economics as a science?

                  Seems to me every time you make a prediction, you should at the very least have a disclaimer that "This Prediction Contains No Real Science".

                  The dossier on my DKos activities during the Bush administration will be presented on February 3, 2014, with an appendix consisting an adjudication, dated "a long time ago", that I am Wrong.

                  by Inland on Wed Apr 30, 2014 at 02:08:43 PM PDT

                  [ Parent ]

                  •  Not only that (1+ / 0-)
                    Recommended by:
                    bobswern

                    but I've been known to make predictions about football and baseball games.
                      The nerve of me!

                    "The oppressors most powerful weapon is the mind of the oppressed." - Stephen Biko

                    by gjohnsit on Wed Apr 30, 2014 at 02:24:02 PM PDT

                    [ Parent ]

                    •  I think you do have some nerve, making (1+ / 0-)
                      Recommended by:
                      Dbug

                      predictions that you now admit aren't based on anything real.   And what's more, you're really angry when anyone disagrees with your predictions.

                      I think that to make predictions based on something you, secretly, don't consider to be a science is shameful.  That you treat everyone who disagrees with the predictions with hostility is really puzzling.  If we're all just slinging bullshit with economics, why are you making and so personally vested in your economic  predictions?

                      And yes, I expect an actual answer from you.  Now.

                      The dossier on my DKos activities during the Bush administration will be presented on February 3, 2014, with an appendix consisting an adjudication, dated "a long time ago", that I am Wrong.

                      by Inland on Wed Apr 30, 2014 at 02:39:13 PM PDT

                      [ Parent ]

                      •  I feel so terrible (1+ / 0-)
                        Recommended by:
                        bobswern

                        especially since it is you, Inland, that is upset with me.

                          It's not like you've ever misunderstood or misrepresented anything I've ever written. It's not like you would ever troll my diaries. And Heaven forbid the idea that you would ever be anything other than honest in a debate with me.

                         So of course I am greatly concerned with your demands that you toss out there at random.
                          Let me get right on that, because your concerns are always at the very top of my list.

                        "The oppressors most powerful weapon is the mind of the oppressed." - Stephen Biko

                        by gjohnsit on Wed Apr 30, 2014 at 03:44:59 PM PDT

                        [ Parent ]

                        •  Nobody else knows. (0+ / 0-)

                          But since you deflect any attempt to justify yourself, I'll be certain to bring it up in your next fake economics diary. We'll see if it's just me.

                          The dossier on my DKos activities during the Bush administration will be presented on February 3, 2014, with an appendix consisting an adjudication, dated "a long time ago", that I am Wrong.

                          by Inland on Wed Apr 30, 2014 at 04:10:26 PM PDT

                          [ Parent ]

          •  And as we all know, many of those 8.8 million (0+ / 0-)

            jobs suck. Only a conservative, a libertarian, or a neoliberal would have the gall to call getting a 30K/year job to replace your 60K/year job a "recovery".

            Sure, it's a recovery all right: a recovery for the plutocratic class that took it on the chin under the New Deal. For everyone else, it's a serious backslide.

            To put the torture behind us is, inevitably, to put it in front of us.

            by UntimelyRippd on Thu May 01, 2014 at 11:26:25 AM PDT

            [ Parent ]

  •  As a member of the Doom-and-Gloomers (12+ / 0-)

    I still don't believe we are entering a recession.

    However, and I've pointed this out several times, our current economic growth period is historically very old. The simple law of averages says that a recession is in our near future.
      That's not a bold statement. It's simple logic.

     There is very little chance that we'll make it to 2016 without a recession.

    "The oppressors most powerful weapon is the mind of the oppressed." - Stephen Biko

    by gjohnsit on Wed Apr 30, 2014 at 09:06:11 AM PDT

    •  Do you really think this? I keep (0+ / 0-)

      thinking we'll go into 2016 with a roaring economy.

      From Neocon to sane- thanks to Obama- and Kos.

      by satrap on Wed Apr 30, 2014 at 09:08:18 AM PDT

      [ Parent ]

    •  If we do make it, it will mark one of the ... (6+ / 0-)

      ...postwar stretches between the start of one recession and the start of another.

      Don't tell me what you believe, show me what you do and I will tell you what you believe.

      by Meteor Blades on Wed Apr 30, 2014 at 09:09:17 AM PDT

      [ Parent ]

      •  Correx: one of the LONGEST postwar...n/t (8+ / 0-)

        Don't tell me what you believe, show me what you do and I will tell you what you believe.

        by Meteor Blades on Wed Apr 30, 2014 at 09:13:48 AM PDT

        [ Parent ]

        •  That's what I guessed (2+ / 0-)
          Recommended by:
          JJ In Illinois, YucatanMan

          Making it to even the start of 2016 without a recession would be beaten only by the late 60's,  late 80's, and late 90's economic surges for length.
             Making it past the 2016 election without a recession would simply be unprecedented.

            To predict that would require some sort of logical justification. I have seen none.
            Interestingly, no economist is predicting a recession. In the same way, economists are surprised by the coming of night at the end of each day.

          "The oppressors most powerful weapon is the mind of the oppressed." - Stephen Biko

          by gjohnsit on Wed Apr 30, 2014 at 09:20:42 AM PDT

          [ Parent ]

          •  When you have a sample size of 10 (0+ / 0-)

            nothing is significant.  

            The reality is that most recessions are caused by the fed raising interest rates to stamp out inflation.  We have no inflation to speak of now, nor is the fed tightening or planning to tighten by any large amount prior to 2016, thus I doubt a recession is in the cards.  

            The last three expansions have been 7.66 years, 10 years, and 6.08 years.  In June we will be at 5 years for this expansion.  

            •  Most recessions are caused by the inevitable (0+ / 0-)

              popping of whatever bubble is propping up the latest expansion.

              Because of the requirement that the financial wealth of the plutocracy grow continually and at a geometric rate, every expansion eventually hits the point where the credit that has been extended to consumers in order to pay the plutocrats' ever-growing vigorish exceeds any possibility of repayment. When this point is reached, the plutocrats lay off workers, scratch their heads, do whatever they can to realize all of that extended credit, and then restart the scam, having just gathered to themselves another big additional share of the nation's real wealth.

              To put the torture behind us is, inevitably, to put it in front of us.

              by UntimelyRippd on Thu May 01, 2014 at 11:36:13 AM PDT

              [ Parent ]

  •  Can you IMAGINE (6+ / 0-)
    Recommended by:
    Gooserock, gjohnsit, aznavy, DuzT, Aquarius40, TomP

    what these numbers will be with an R controlled congress and WH?  Shiver...

    From Neocon to sane- thanks to Obama- and Kos.

    by satrap on Wed Apr 30, 2014 at 09:07:32 AM PDT

  •  Well, at least .1% don't have to worry about (3+ / 0-)
    Recommended by:
    Major Kong, NoMoreLies, satrap

    inflation... that would be an economic catastrophe.

    Democracy - 1 person 1 vote. Free Markets - More dollars more power.

    by k9disc on Wed Apr 30, 2014 at 09:22:12 AM PDT

  •  Key words: "incomplete data" (1+ / 0-)
    Recommended by:
    TomP

    The second estimate for the first quarter, based on
    more complete data, will be released on May 29, 2014.

    That means it's not worth the trouble of searching for an explanation. Maybe an incomplete explanation would go along with the "incomplete data."

    So you know I'm poking fun, I tipped you. Because you included the two most important words: "incomplete data."
    Not everyone is as honest and I expect the tv pundits must be howling about the Second Obama Recession or some such nonsense by now. They won't notice when the numbers are revised upward either.

    Enough with the preambles. What's the reason for the slowdown?

    It's EU business exiting US tech firms that said they'd protect privacy, but didn't.

  •  Temporary slacking off due to cyclicality (1+ / 0-)
    Recommended by:
    satrap

    I don't see an inflection point.

    Daily Kos an oasis of truth. Truth that leads to action.

    by Shockwave on Wed Apr 30, 2014 at 09:45:30 AM PDT

  •  changed from GNP to GDP - makes economy "better" (3+ / 0-)
    Recommended by:
    greenbastard, a2nite, Eric Nelson

    I was not award of the change until I read about it. I have permission from the author to reproduce any of the book.

    By 1991 we had more debt than any nation in the world. The amount owed by individuals, businesses, banks and insurance companies, and government at all levels amounted to $11.3 trillion. A sizable chunk of this debt was owed to foreign investors (individuals and governments). This affects the size of nation’s output when the measure used is GNP. With GNP, all interest payments to foreigners have to be deducted from the final tally. What if our total debt (for government, business, and households) continued to increase? At the time, no one imagined it would reach today’s $34.7 trillion, or that the national government alone would owe more than $14 trillion, half of which is owed to foreigners.56 But some dared to think it could get very big. Year after year, we would have to deduct ever-larger interest payments to foreigners from the total value of the economy. The GNP might actually begin to shrink. Not a pretty picture. It would be a constant reminder to the public of what we had become, a hat in hand debtor to the world.

    So the Bureau of Economic Analysis switched from GNP to GDP. By using the GDP measure, we do not have to deduct the interest paid to foreigners from the total number. This can make the economy seem larger, sometimes by as much as 1 or 2 percent. For example, in the second quarter of 2004, BEA’s estimate for annual GDP growth was 3.3 percent. The GNP number was much lower, just 1.9 percent. Both the GDP and GNP numbers would have been even lower had BEA not rigged the formulas for measuring the economy’s output by using the various techniques described below.

    from the outstanding book

    “Worse than You Think: The Real Economy Hidden Beneath Washington’s Rigged Statistics, And Where To Go From Here”, by Keith Quincy. It is 99 cents for an electronic copy from amazon.com

  •  The effects of austerity... (10+ / 0-)

    The real economy suffered four huge hits in the last half of 2013: 1) Sequester. 2) Government shutdown. 3) End of long-term unemployment supports. 4) Cut in food stamps.

    There were all results of political decisions made to impose austerity.

    Furthermore, income inequality is now so badly skewed that national economic statistics no longer have any accurate indication of how bad things are for the bottom half or more of our fellow citizens. If the richest 100 people in America had $200 billion more in income last year, while the remaining 313.9 million lost $100 billion in income, national economic statistics right now would show that the economy "improved" by $100 billion.

    There will be no real economic recovery until Wall Street's political power is destroyed, and the financial system reoriented from speculation and usury, to real investments in the $100 trillion of work we need to do to solve the problem of climate change. We are actually standing on the verge of a massive new economic boom that will last for a few decades, just like the boom unleashed by meeting pent-up consumer demand after World War 2 and rebuilding Europe and Japan. All we have to do is lock up about 10,000 financial predators, and sweep away the elites of the past half century, who have proven themselves irredeemably incompetent and corrupt.

    A conservative is a scab for the oligarchy.

    by NBBooks on Wed Apr 30, 2014 at 09:53:37 AM PDT

  •  Beatings will continue until morale improves. NT (2+ / 0-)
    Recommended by:
    gjohnsit, jbsoul

    "The true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals." - Barack Obama

    by HeyMikey on Wed Apr 30, 2014 at 10:03:31 AM PDT

  •  Krugman: "lowflation" essentially = deflation. (3+ / 0-)
    Recommended by:
    satrap, Eric Nelson, jbsoul

    "The true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals." - Barack Obama

    by HeyMikey on Wed Apr 30, 2014 at 10:11:58 AM PDT

  •  What will Yellen do? (2+ / 0-)
    Recommended by:
    satrap, Eric Nelson

    She's walking on shaky ground.  If the Fed continues to pull the punch bowl away, she could send us over the edge.  If they postpone cutting the bond purchases, the markets will jump and the rich will get richer.

    Their statement comes out in about 45 minutes.

  •  weather & government shutdown vs ACA (2+ / 0-)
    Recommended by:
    Eric Nelson, Fury

    people staying home in bad weather and the effects felt from the government shutdown result in a drop in spending and other economy  activity and increased economic activity attributable to the kick in the ass the economy is now receiving from the implementation of Obamacare should make 2nd and 3rd quarter numbers spike

    Patriotism is the last refuge to which a scoundrel clings. Steal a little and they throw you in jail. Steal a lot and they make you king.... Dylan

    by bywaterbob on Wed Apr 30, 2014 at 10:53:12 AM PDT

  •  A Good Question.. (2+ / 0-)
    Recommended by:
    lehman scott, jbsoul

    ..Re the Piketty Book

    why is this 600+ page book by a hitherto little-known French economist [Piketty], laden with data and charts, taking the world by storm?

    So even if you’re not reading Krugman and others regularly, there’s a sense among many people of many different political stripes that something is structurally wrong with both the economy and the practice of economics.   Between financial bubbles and busts, the macro-management seems inept and even once the economy starts growing again, the benefits accrue narrowly to the top.

    In part, it’s a sense that “the fix is in” when it comes to the distribution of growth.  In this regard, Piketty’s r>g (see here for a very cogent explanation) can be viewed as the economic mechanics of the fix.  Moreover, especially given the uniquely pervasive money-in-politics problem in the US, it’s a self-reinforcing fix.

     - emphasis added

    ..because people are hurting and want answers..

    ..that these these alternative methods could help provide - imo..

    Commission on the Measurement of Economic Performance and Social Progress, Canada's Genuine Progress Index(a version of which has recently been tried out in Maryland), the Human Development Index and the Gini coefficient.
    ..are very good issues for Dems to take on. I don't have any economics expertise or knowledge to add about that but this seems like a no-brainer to me

    The fix is in; a sort of re-dux of #OWS but with sustainable teeth/policies to back up the message. that there will be no middle class the way we're heading without fundamental/structural change.

    The party that really takes this on, without fear, triangulation, or ceding to the messages coming from the elites, but uses this "fix is in" which most working and looking for work people are experiencing in real time and have been saying so, and offers up the answers that many already know are just sitting waiting for someone with the political courage to stand up and fight the existing system will be the winning party - because there are way more of us than the 1%er elites money or not

     - that is my belief

    Thx MB

  •  Thanks, MB. The facts just continue to roll in. (1+ / 0-)
    Recommended by:
    Eric Nelson

    The era of economic growth fueled by cheap fossil fuels is over.  Piketty has demolished Solow's Exogenous Growth Model.  Neoclassical economics is imploding.  If we don't want the entire global economy to implode along with it we had better start a program to redefine how we measure wealth and growth, and fast.  And that's what the GPI is all about.  Thanks so much for continuing to hammer the importance of that home, MB.  It is a key element in the initiatives we need to be undertaking right now.

    Pessimism of the intellect; optimism of the will. - - Antonio Gramsci

    by lehman scott on Wed Apr 30, 2014 at 02:12:19 PM PDT

  •  GDP also doesn't measure.... (0+ / 0-)

    The long-standing deterioration of the neglected American infrastructure.

    Rust never stops.

    And, Americans have not substantially invested in bridges, roads, railroads, airports, power grids, dams, reservoirs, etc. for decades.  Since '81.

    Furthermore, Americans have cut investment in education, scientific research, war on poverty, etc.

    For the Republican Party, apparently the future will never come and selfishness truly is a virtue.

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