GDP rebounds in the second quarter

Jul 30, 2014 18:47 UTC

Good news: the economy bounced back last quarter. In fact, after a terrible first quarter in which the economy contracted at a 2.1 percent rate, GDP rebounded to grow at a 4 percent annual rate between April and June.

The news was a beat — expectations were only for 3 percent growth. However, the average growth rate of the economy over the last few years still hovers around 2%, as you can see in this chart:


Here are more details from Reuters, including how this might affect the Fed’s decision about when to raise interest rates:

The GDP data, which was released only hours before Federal Reserve officials conclude a two-day policy meeting, could fuel debate on whether the central bank may need to raise interest rates a bit sooner than had been anticipated.

Growth in the second quarter was driven mainly by consumer spending and a swing in business inventories.

Consumer spending growth, which accounts for more than two-thirds of U.S. economic activity, accelerated at a 2.5 percent pace, as Americans bought long-lasting manufactured goods and spent a bit more on services.

Consumer spending had braked to a 1.2 percent pace in the first quarter because of weak healthcare spending.

Despite the pick-up in consumer spending, Americans saved more in the second quarter. The saving rate increased to 5.3 percent from 4.9 percent in the first quarter as incomes rose, which bodes well for future spending.

Fewer Americans are getting laid off, but not enough are getting hired

Ben Walsh
Nov 21, 2013 15:25 UTC

The number of Americans filing new claims for unemployment benefits is at a two-month low, data released by the Labor Department this morning shows.  From the report:

In the week ending November 16, the advance figure for seasonally adjusted initial claims was 323,000, a decrease of 21,000 from the previous week’s revised figure of 344,000. The 4-week moving average was 338,500, a decrease of 6,750 from the previous week’s revised average of 345,250.

Reuters writes that the new data suggests “some strengthening of labor market conditions”. However, “while layoffs have slowed significantly to normal levels, there has not been a rapid acceleration in hiring as domestic demand remains lukewarm”.

Reuters charts jobless claims, as well as  average unemployment duration, and the labor market participation rate:







Obama, Pelosi, Reid, Schummer and the rest of the Democrats are not interested in creating jobs. They are interested only in things that advance them. If we had great economic conditions we would have low unemployment and good benefits and income for our families. The Democrats fight hard to keep Social Security, the Post Office and the like under government control so these can be used as political tools to advance the Democrats causes. This is why these institutions are in such dire financial shape. Things will be better when Obama is out of office and another party takes over unless we have a socialistic or communist party, which is where Obama is taking the U.S.

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Who’s buying US debt?

Nov 18, 2013 15:58 UTC

 Here’s a Reuters graphic answering this question, based on new Treasury sales data for September. 

Here’s more from Reuters:

Foreigners fled from short-term U.S. assets in September as a budget battle in Washington raised fears the government could default on some obligations, though demand for longer-term securities rose, U.S. Treasury data showed on Monday.

The budget standoff that was building in September forced a partial government shutdown that lasted for the first 16 days of October. That dented the safe-haven status of U.S. Treasury bills and pushed yields up sharply on bills maturing toward the end of that month.

It’s important to remember that the US itself actually is the single biggest holder of its own debt. Foreign holdings, David Lauter writes, represent only one-third of overall US debt.


“….ONLY one-third of overall US debt.” (emphasis added) and how many billions or trillions is that?

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U.S. consumer sentiment took a huge hit in October

Oct 25, 2013 15:00 UTC

On the heels of the 16-day government shutdown, US consumer sentiment took a huge hit in October. From Reuters:

The Thomson Reuters/University of Michigan’s final reading on the overall index on consumer sentiment fell to 73.2 in October from 77.5 in September and was the lowest final reading since December 2012.

The October figure was lower than both the 75.0 forecast by economists in a Reuters poll and the mid-month preliminary reading of 75.2.

Here’s what consumer sentiment has looked like over the last six years:

On a related note, Sober Look noted last week that the Gallup economic confidence index was at its lowest since 2011: (more…)


Gee, who would think that a government abdicating its responsibilities would impact consumer confidence?

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