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Second-quarter US GDP growth revised up to 4.2 percent on software, trade

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Re: Second-quarter US GDP growth revised up to 4.2 percent on software, trade

#21

Post by jorblumesea »

joefranklinsrs wrote: post #2

I haven't seen US economy this versatile and powerful in a long time, maybe since the 80s. This economy is diversified - manufacturing jobs used to be 32% in the 60s, now it is around 9% currently, but it is growing fast this year. We now have new jobs in every sectors growing, from finance (NY), college (Boston), healthcare (east coast), government (Washington DC), entertainment (Los Angeles), oil and gas (Texas), i…

While the US economy is doing great, it feels like the US workers are doing worse than ever. Spiraling healthcare costs, unaffordable housing, student debt and a lack of real wage growth are all pinching the middle class out of existence. Unemployment is low, but many of the job gains are in low skill temp positions and the gig economy.

As is usual for the past 20 years, capital is doing great while labor suffers.

Re: Second-quarter US GDP growth revised up to 4.2 percent on software, trade

#23

Post by NTDF9 »

joefranklinsrs wrote: post #2

I haven't seen US economy this versatile and powerful in a long time, maybe since the 80s. This economy is diversified - manufacturing jobs used to be 32% in the 60s, now it is around 9% currently, but it is growing fast this year. We now have new jobs in every sectors growing, from finance (NY), college (Boston), healthcare (east coast), government (Washington DC), entertainment (Los Angeles), oil and gas (Texas), i…

> Coupled with the flooding of capital back to US via the reduced expatriation tax rate, US is firing on all cylinders.

What happens when all the money is repatriated and no more dollars left for other countries to import from US?

Re: Second-quarter US GDP growth revised up to 4.2 percent on software, trade

#24

Post by sharemywin »

joefranklinsrs wrote: post #14
tootie wrote: post #7

Earlier quoted context omitted.

Wage data is well-tracked and is shown to be growing more slowly than inflation. It's possible the high growth in nominal wages are engendering some good feelings, but actual purchasing power is dropping. https://www.washingtonpost.com/amphtml/business/2018/07/12/i...

My theory is that people are moving up to better jobs, after years of job training, education, and depressed demands, after 2008. Which would explain the low unemployment rate. Thus even though the wages for some industries are stagnating/declining, people are moving to better job positions, and thus have more money to spend.

Probably has nothing to do with all the credit consumers and businesses are running up:

https://www.cnbc.com/2018/05/21/consumer-debt-is-set-to-reac...

https://www.washingtonpost.com/business/economy/beware-the-m...

Re: Second-quarter US GDP growth revised up to 4.2 percent on software, trade

#25

Post by beerlord »

One thing I've noticed hiring in both the USA, Australia, and Europe is the huge amount of 'hidden' taxes in Europe.

For example, if I hire a worker even on minimum wage, I'm paying up to half of their gross labour cost (depending on the country) as taxes to the Government! This is called things like a social security tax, healthcare tax, disability tax, etc etc.

By contrast in the USA you have one pretty simple and low payroll tax, plus health insurance. Australia has it even better, with no health insurance, though you do have mandatory superannuation/retirement fund contributions on behalf of the employee (all still much lower in Europe).

This creates huge incentives in Europe to just pay cash in hand, or say pay the annual bonus or overtime as cash. There are also a lot of companies afraid of growing larger and hiring more staff, because it will make their cash payments harder to conceal.

I hope from this boom in the US that the Federal Government can remove payroll taxes there. Combined with a move to a single-payer healthcare system, hiring and paying US employees could be the simplest on the planet.

Re: Second-quarter US GDP growth revised up to 4.2 percent on software, trade

#26

Post by MR4D »

NTDF9 wrote: post #23
joefranklinsrs wrote: post #2

I haven't seen US economy this versatile and powerful in a long time, maybe since the 80s. This economy is diversified - manufacturing jobs used to be 32% in the 60s, now it is around 9% currently, but it is growing fast this year. We now have new jobs in every sectors growing, from finance (NY), college (Boston), healthcare (east coast), government (Washington DC), entertainment (Los Angeles), oil and gas (Texas), i…

> Coupled with the flooding of capital back to US via the reduced expatriation tax rate, US is firing on all cylinders. What happens when all the money is repatriated and no more dollars left for other countries to import from US?

We win.

Seriously though, you’re asking a fantastic question. And, surprisingly, my tongue in cheek response above is sort of correct. The world was actually in a similar position to the one you ask about right after WWII ended. The world was still on fire and most countries had no real currency to spend. So, we loaned them the money to buy our goods (not much of a services economy back then).

Of course, that’s what we know today as the Marshall plan. In it, we gave billions of dollars of aid to other countries to help them rebuild their infrastructure and economies.

But if that ever happened in peacetime (I.e. not right after a war), then that would be very unusual. Maybe after a worldwide depression, but that is usually followed by war anyway.

Great question, and hopefully we never really find out. It probably would be a very rough ride for lots of people on this planet.

[0] - http://www.history.com/topics/world-war-ii/marshall-plan

Re: Second-quarter US GDP growth revised up to 4.2 percent on software, trade

#27

Post by refurb »

tootie wrote: post #7
joefranklinsrs wrote: post #5

Earlier quoted context omitted.

Could you link something that supports your opinion? As for me: US consumer confidence surges in August to 18 year high. https://www.theguardian.com/business/2018/aug/29/us-economy-... . Consumers wouldn't be spending if they didn't have extra cash in their pocket, and they expect the economy to stagnate/decline

Wage data is well-tracked and is shown to be growing more slowly than inflation. It's possible the high growth in nominal wages are engendering some good feelings, but actual purchasing power is dropping. https://www.washingtonpost.com/amphtml/business/2018/07/12/i...

What you should be looking at is total compensation. Wages plus non-wage benefits. It’s been growing over the last few decades and out pacing inflation.

The down side is a lot of that is medical insurance where most people don’t see a benefit from the higher expenditure.

Re: Second-quarter US GDP growth revised up to 4.2 percent on software, trade

#28

Post by nopinsight »

MR4D wrote: post #26
NTDF9 wrote: post #23

Earlier quoted context omitted.

> Coupled with the flooding of capital back to US via the reduced expatriation tax rate, US is firing on all cylinders. What happens when all the money is repatriated and no more dollars left for other countries to import from US?

We win. Seriously though, you’re asking a fantastic question. And, surprisingly, my tongue in cheek response above is sort of correct. The world was actually in a similar position to the one you ask about right after WWII ended. The world was still on fire and most countries had no real currency to spend. So, we loaned them the money to buy our goods (not much of a services economy back then). Of course, that’s what…

> my tongue in cheek response above is sort of correct.

The world is in a very different state now. Most of the manufacturing bases are outside the US. If the US somehow withheld the dollar, most of the world would just switch to alternative currencies and continue to trade with one another.

That of course would most likely never happen in our lifetimes, since the dollar is a key pillar in the American economy and global power projection.

Re: Second-quarter US GDP growth revised up to 4.2 percent on software, trade

#29

Post by simula67 »

VikingCoder wrote: post #11
user1324345 wrote: post #4

[flagged]

Yes, he did. It's amazing how inheriting a thriving economy, and then lowering taxes, while increasing government spending, can result in a strong economy. Unfortunately the national debt is going up and up, too.

US economy is strong enough that it rebounds after a crash like in 2008. The recovery under Obama was the worst in a long time [1]

Stock markets ( which are a rough proxy for investor confidence ) went up on the eve of election results [2], so it is an awfully specific time for the "inherited economy" to improve

[1] https://www.forbes.com/sites/louiswoodhill/2012/08/01/obama-...

[2] https://www.businessinsider.in/Heres-why-stocks-have-been-on...

Re: Second-quarter US GDP growth revised up to 4.2 percent on software, trade

#30

Post by NTDF9 »

MR4D wrote: post #26
NTDF9 wrote: post #23

Earlier quoted context omitted.

> Coupled with the flooding of capital back to US via the reduced expatriation tax rate, US is firing on all cylinders. What happens when all the money is repatriated and no more dollars left for other countries to import from US?

We win. Seriously though, you’re asking a fantastic question. And, surprisingly, my tongue in cheek response above is sort of correct. The world was actually in a similar position to the one you ask about right after WWII ended. The world was still on fire and most countries had no real currency to spend. So, we loaned them the money to buy our goods (not much of a services economy back then). Of course, that’s what…

Honestly, that was a toungue in cheek question. This was encountered more recently here: https://www.imf.org/external/about/histdebt.htm

The answer last time was global recession. Mainly because there was no alternative to USA and Soviet Union (which was crumbling). Third world countries were used as pawns.

This time though, most other countries have solid institutions of their own. More likely, they will unite and start trading with each other in other currencies, gradually reducing dependence on dollar and trading with the US.

The bitter truth about the world is that the US was a hero in 80s and 90s. Today, it's a toxic material that everyone deals with simply because of petrodollar.

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