The US economy grew at a revised 3.3% annually in the second quarter of 2008, the Commerce Department said, much higher than its first estimate of 1.9%.
The rebound was linked to strong US exports, helped by the weak dollar, while government tax rebates also boosted consumer spending.
GDP grew at a rate of 0.9% in the first quarter, after a 0.2% contraction in the last three months of 2007.
The Federal Reserve has warned the economy will remain weak this year.
"While we're not out of the woods yet, maybe we're beginning to see some sunlight," said John Wilson, equity strategist at Morgan Keegan.
No recession?
Moderator: Jim O'Bryan
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Stephen Eisel
- Posts: 3281
- Joined: Fri Jan 26, 2007 9:36 pm
No recession?
but we are not out of the woods yet (clicky)
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Tim Liston
- Posts: 752
- Joined: Sun Aug 07, 2005 3:10 pm
Hey Stephen, let me see if I have this right....
Substantially more of the stuff we produce is going overseas, exports up 13.2%. And we're importing substantially less, imports down 7.6%. Yet that's somehow a sign of a robust domestic economy.
Consumer expenditures increased 1.7%, thanks in part to the stimulus checks. Federal government expenditures increased 6.8%. Somehow that's a sign of a healthy economy.
Payrolls are down five months in a row, unemployment is up, housing is dismal yet by golly growth is robust.
Finally, and here's the real humdinger, if you believe that the 2nd quarter GDP increased 3.3%, you also have to believe that 2nd quarter inflation was only 1.2%. That was the value of the GDP deflator that was used to adjust the GDP figure downward to 3.3% to adjust for higher prices. But if I recall correctly, the second quarter CPI was about 2.5% FOR THE QUARTER (all the other figures are annualized).
Check out this chart to see what I mean.
If you take out the portion of GDP that resulted from the narrowing of the trade gap, and the portion that resulted from increased government spending, and further adjust for a realistic assessment of inflation, you get significantly negative increase in GDP.
Let me put it another way. The GDP is in large part a measure of exports, government spending, and inflation. And perhaps even population growth. It does not tell us much about the health of our domestic economy.
We've over-borrowed and over-spent and we are nowhere near out of the woods....
Substantially more of the stuff we produce is going overseas, exports up 13.2%. And we're importing substantially less, imports down 7.6%. Yet that's somehow a sign of a robust domestic economy.
Consumer expenditures increased 1.7%, thanks in part to the stimulus checks. Federal government expenditures increased 6.8%. Somehow that's a sign of a healthy economy.
Payrolls are down five months in a row, unemployment is up, housing is dismal yet by golly growth is robust.
Finally, and here's the real humdinger, if you believe that the 2nd quarter GDP increased 3.3%, you also have to believe that 2nd quarter inflation was only 1.2%. That was the value of the GDP deflator that was used to adjust the GDP figure downward to 3.3% to adjust for higher prices. But if I recall correctly, the second quarter CPI was about 2.5% FOR THE QUARTER (all the other figures are annualized).
Check out this chart to see what I mean.
If you take out the portion of GDP that resulted from the narrowing of the trade gap, and the portion that resulted from increased government spending, and further adjust for a realistic assessment of inflation, you get significantly negative increase in GDP.
Let me put it another way. The GDP is in large part a measure of exports, government spending, and inflation. And perhaps even population growth. It does not tell us much about the health of our domestic economy.
We've over-borrowed and over-spent and we are nowhere near out of the woods....
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Stephen Eisel
- Posts: 3281
- Joined: Fri Jan 26, 2007 9:36 pm
