8.2% growth in US GDP last quarter.....

[Dr Mordrid]

Looks like the US recession is over;

GDP (gross domestic product) increased 8.2% in the last quarter. This is the largest quartely increase in the US GDP in over 20 years. 3% is considered normal.

GDP totaled $9.82 trillion inflation corrected; $11.06 trillion actual.

Consumer spending up 6.4%

Residential construction spending up 22.7%

Durable goods spending up 26.5%

Inflation is only 1.6% annualized

Estimates are that 300,000 jobs were added in the last quarter and that once the recovery hits its stride 200,000 to 300,000 jobs will be created per month for at least the next year.

Dr. Mordrid

[Umfriend]

That is very good news indeed. Being (involuntary) unemployed (which I have never experienced myself) seems tuff to me, and it's good for those the be able to get a job again. Is that 8.2% y-o-y or q-o-q and is it annualised? (I guess it has to be)

I am trying to find numbers on US federal and state taxes, deficites and revenues etc. Can anyone tell me a great site for statistics like these?

[GNEP]

Can't call it over unfortunately until you have a couple of consecutive quarters... here's hoping though

[Brian Ellis]

Statistics!

The problem is that a single quarter, or even a couple or so, is fairly meaningless. A very sudden increase, like this, cannot be extrapolated, especially just before an election year. If you show the 1 year running average over the last few years' quarters, you will see what I mean. This is mostly within the limit of noise. The danger is that this will be quite inflationary (workers who have had no rises will want to see some results for their loyalty before no hands are hired). Greenspan and Co. will have to increase the base interest rate, probably about next Spring, then mortgage rates will rise farther, which will prick the housing bubble. A slow, controlled, steady rise is much better to see.

[cjolley]

Does this mean that if we take out our credit card and max it, that our financial statement will look better?
chuck

[Jammrock]

I'll consider the recession over when my compnay stops laying off people!! You know ... like potentially me. And when the market opens up enough for me to actually find a job elsewhere.

Until then, it's still on, full bore, despite what the numbers say.

Jammrock

[cjolley]

These numbers are the result of $400,000,000,000 in borrowing for tax rebates and government spending.
It remains to be seen what the economy will do after this jolt in the arm wears off.
If businesses think the money surge is only temporary then they won't be hiring.
If they think spending will last they will hire.
I think too many people have personal debt levels that will prevent the spending from being sustained.
Chuck

[Dr Mordrid]

For the record this is the 4th quarter of increases in the GDP with the last two being 6% or more. Economists say after 3 quarters of increases a recession is over.

Also interesting is that unemployment applications are down bigtime while jobs are increasing so fast that each of the last three months have had to have their numbers revised upwards.

As for the deficit spending; that only takes you up a small amount since that figures percentage of the GDP is so small. It's called priming the pump. Once primed the economic pump starts producing enough new activity (and the taxes on same) to cover the deficit.

This is how the deficits of the 80's were covered in the 90's and this kind of priming has worked every time it's been tried; starting with Kennedy's tax cuts in the early 60's.

Dr. Mordrid

[cjolley]

From your lips to God's ear...
chuck

[Umfriend]

Can't say I have done a lot of research (hard for me to find data), but:
1. It seems to me that tax revenues are roughly 17% of GDP.
2. This means that each dollar borrowed to pimp the pump needs to generate over $5 in GDP to be earned back.
3. It seems therefor, that with current tax rates, the economy needs to grow by 15% to make up for the "investment"
4. Otherwise, increasing taxes or cutting spending are required, but:
4a. Increasing taxes works badly according to some (like Bush, I think)
4b. Cuts in spending on themselves tend to have a negative effect on GDP.

The intention is to borrow on average 318 billion per annum for 6 years, which is about 2.5% of GDP per annum. GDP growth is expected at slightly less than 5%, and the excess tax benefits are included already in receipts. When, is my question, will are GDP growth and the resulting increase in tax receipts expected to make up for these deficits?

Excess spending does indeed tend to stimulate GDP and to bring unemployment down, but the notion that this will be automatically earned back in taxes as a result is simply not correct.

An interesting table can be found at: http://www.whitehouse.gov/omb/budget...arytables.html

I have not yet found the total debt of the US.

What is more worrying is the fact that treasury vs swap spread have tightend tremendously. This means that US Government paper whcih used to be in short supply, is steadily approaching the point where supply saturates demand. Interest rates will lickely rise then, and I suspect that it will rise fast.

[KRSESQ]

Also, this is a fairly common pattern after virtually every economic downturn our country has faced since 1776. Occasionally in the past, the economic gains did cause inflation, but today (I like to think) our money managers at the Federal Reserve are astute enough to take measures to prevent that, like they have in every cycle since 1980.

And that's about as much of my college economics class as I remember!

Kevin

[Wombat]

It's not over until I'm employed again (I've been out a year).

[Dr Mordrid]

And just what have you done to mitigate that situation? Retraining? Physical relocation to a more economically "hot" city?

Don't be like those steelworkers who insisted on staying in Pittsburgh after the steel industry want phooey instead of moving south.

Dr. Mordrid

[Wombat]

Originally posted by Dr Mordrid
And just what have you done to mitigate that situation? Retraining? Physical relocation to a more economically "hot" city?

Retrain? Nope, my degree is only two years old, and my experience is cutting edge. I love what I am skilled at, and produce good results. It's too early for me to be tired of what I've spent so long training for.

Relocation? Yes, I moved down to Denver. I have Denver, the tech center, Boulder, Colorado Springs, and Fort Collins within an hour or less of me. The only places that *might* make more sense for me are Austin or somewhere in CA. But CO is really right for me.

CO's economy went from #3 to #48. Yes, that's bad, but nowhere in the country is truly "hot." I've got friends in all those cities, and it wouldn't have made much difference for a younger employee like myself. Over the last year, companies went from doing no work, to doing work through 1099 contractors (who I can't compete with at all), to hiring one v. experienced guy because they only get one of their 3-4 needed positions approved. Finally it looks like they might be considering someone more "junior" like myself.

[Jammrock]

Originally posted by Dr Mordrid
And just what have you done to mitigate that situation? Retraining? Physical relocation to a more economically "hot" city?

Don't be like those steelworkers who insisted on staying in Pittsburgh after the steel industry want phooey instead of moving south.

Dr. Mordrid

1) I have never stopped training.
2) What economically hot city?

Jammrock