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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

#51
post #3

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…

The economy is growing but it doesn't appear to actually be flowing back into most citizens pockets. The unemployment rate is very low but wages aren't rising. Anecdotally, I am seeing more help wanted signs on retail and restaurants near me, but my friends who work those jobs are moving _farther_ away from work due to increasing rent without increasing pay. That doesn't seem sustainable

>The unemployment rate is very low but wages aren't rising.

...yet.

Wages are a driver of inflation, which will rear its head as we reach late cycle. Then we blow up and start over. This is the way of the world.

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

#52
post #9

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…

I’ve been trying to learn a little about economics. Do you have any favorite economists, etc that you follow? I’m trying to learn more about the interaction of QE, rising fed rates, growing deficits, etc. Basically, I’d like to move beyond the headlines and the spin. [Update] Here are some people I try to follow: Jan Hatzius - Goldman Economist Robert Schiller Stephen Roach - Yale Economist https://www.project-syndic…

>Basically, I’d like to move beyond the headlines and the spin.

Create a Twitter account and get on FinTwit (finance Twitter). Find the people doing real research (you have a couple in your list, Dalio, Grantham, I follow some of the guys from Ritholtz Wealth Management who are active on the platform) and follow their retweets or follows. More information than you can handle.

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

#53

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…

There is a lot you can criticize Trump about but what he has done with the economy deserves a lot of credit. Just 3 or 4 years ago, economists were saying that we would never see 4% growth ever again and that 1 to 2% growth was the new normal.

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

#54
post #40

The challenge of the next 10 years will be housing. We are not building nearly enough. A fraction of what we need even to slow price growth. We still have these quaint subdivisions built in the 60s and 70s full of nimbyism and voting down all development. We need a big move here.

The only area that I am aware of that has that problem is the bay area. Yeah, you guys are fucked but every other city that I am aware of is aggressively building to supply demand for housing.

Boston, NYC, and DC are all similarly fucked. Not as bad, but not good...

Part of the problem is that a lot of wage growth is concentrated in areas that are experiencing a housing crunch.

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

#55
post #33

Earlier quoted context omitted.

Given that so much of it is medical insurance, why is that what you should be looking at?

Because you're still getting paid it.

If it doesn’t make you better off, what’s the point?

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

#56

Earlier quoted context omitted.

While it's true that wage growth has been slower during since 2009 than in previous business cycles, it's false that real wages have actually gone down (it's up about 1-4% since the end of the last recession depending on how you measure[1]). Additionally, benefits have grown quite a bit over the long term, which makes looking at just wages misleading. If you look at total compensation, we've seen a 60% increase since…

Indeed the cost of benefits has risen precipitously while the value has dropped. White-collar professionals are insulated from this by a combination of much greater employer contribution ratios and a healthier risk pool. I had read an article claiming that the major source of government transfers were due to a much larger percentage of people being on Social Security disability. The causes are a mix of improvement in…

Anecdotally, I feel as though the trend amongst my friends and family has been that the cost of benefits has increased, while the benefits themselves have contracted. I'm lucky to work at a fairly young company where we get nice health insurance options, but even so, our sick leave policy leaves something to be desired.

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

#57
post #3

Earlier quoted context omitted.

The economy is growing but it doesn't appear to actually be flowing back into most citizens pockets. The unemployment rate is very low but wages aren't rising. Anecdotally, I am seeing more help wanted signs on retail and restaurants near me, but my friends who work those jobs are moving _farther_ away from work due to increasing rent without increasing pay. That doesn't seem sustainable

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

"Consumers wouldn't be spending if they didn't have extra cash in their pocket, and they expect the economy to stagnate/decline"

Debt, leverage, credit cards, loans, home equity lines, etc.

Perhaps 2007 is a great teacher about overleveraged consumers "spending money in their pockets".

It wasn't real, sustainable, and ended terribly.

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

#58
post #50
post #48

Earlier quoted context omitted.

>Americans don't have many kids now. There are lots of empty towns all across the country. We thus have plenty of housing. We could stop building today and be fine for decades. But the empty towns also don't have jobs. It's not fine even now.

They did have jobs. What happened? Undo that. It should be even easier now, given that a little remote office can be easily connected to the rest of the world.

Their jobs were based in industries which no longer exist or which have been automated into requiring far fewer workers.

Similarly, you have the problem that a lot of people lived there by necessity rather than by choice.

There are absolutely people who enjoy a rural lifestyle. But there's plenty of rural places not particularly enjoyable to anyone over other rural places with better scenery, less difficulty to getting to a store, etc.

They have/had a town because at one time, there was a farm, or a factory, or whatever there that needed people and it the next closest town was too far of a commute for the time period.

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

#59
post #50
post #48

Earlier quoted context omitted.

>Americans don't have many kids now. There are lots of empty towns all across the country. We thus have plenty of housing. We could stop building today and be fine for decades. But the empty towns also don't have jobs. It's not fine even now.

They did have jobs. What happened? Undo that. It should be even easier now, given that a little remote office can be easily connected to the rest of the world.

> What happened? Undo that.

1. the construction of interstates and airports that routed around old railroad/highway towns.

2. The green revolution. Agriculture became much more efficient, productive, centralized, and automated. See https://en.wikipedia.org/wiki/Agriculture_in_the_United_Stat...

3. Resource extraction running its course.

4. Efficiency improvements in manufacturing and resource extraction.

The amount of rural blight caused by the favority political demon of late (outsourcing of manufacturing) is relatively minor compared to the above items. Especially 1 and 2! (Seriously, if you come across a run-down main street away from any interstate, odds are better than even it used to be a railroad station.)

IF we follow your advice in a way that's meaningful to most rural communities, we'd have to roll back the green revolution, bring back passenger rail, and magically refill coal veins/oil wells.

Other favorite policy quick-fixes as of late (in particular, on-shoring manufacturing) might help a handful of communities but are a teeny, tiny fragment of the story for blighted rural america in general. The ~80% of small towns that never had a factory to begin with can't reasonably blame outsourcing for their woes.

> It should be even easier now, given that a little remote office can be easily connected to the rest of the world.

1. Have you lived in rural America? Especially outside of "technically rural" locations such as university/college towns, good internet connections are sometimes available but usually not. And if not, convincing an ISP to dig is anything but "easy".

2. Most execs have no interest in building a big office in a remote location, both for personal reasons and for legitimate business reasons (proximity to a major airport is important in a lot of businesses).

3. Chicken-and-egg: People very reasonably won't move to most small towns due to lack of quality services (schools, hospitals, and entertainment). But those services can't be established without a critical mass of people moving into town.

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

#60
post #9

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…

I’ve been trying to learn a little about economics. Do you have any favorite economists, etc that you follow? I’m trying to learn more about the interaction of QE, rising fed rates, growing deficits, etc. Basically, I’d like to move beyond the headlines and the spin. [Update] Here are some people I try to follow: Jan Hatzius - Goldman Economist Robert Schiller Stephen Roach - Yale Economist https://www.project-syndic…

One I just found recently (via it being by far the leader in a recent "other blog" survey on slatestarcodex) is:

https://marginalrevolution.com/about

"Marginal Revolution is the blog of Tyler Cowen and Alex Tabarrok, both of whom teach at George Mason University. MR began in August of 2003 and there have been new posts daily since that time. In numerous reviews and ratings over the years Marginal Revolution has consistently been ranked as the best or one of the best economic blogs on the web, but it is more (and less) than that, also representing the quirks of its authors."

As far as I can tell so far, it seems to be a relatively unbiased, non-ideological commentary on economic news. One interesting article (not from the site itself, but from an "assorted links" post) is this one on NAFTA negotiations:

https://moneymaven.io/baldingsworld/china/chinese-economics-...

Maybe I'm wrong, but as far as I can tell, that sort of perspective is highly unusual in mainstream public economic news. I've certainly never seen many articles on trade policy that go much beyond discussing aggregate GDP.

The SSC survey:

https://www.reddit.com/r/slatestarcodex/comments/9aak39/favo...

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