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US economy returned to growth last quarter, expanding 2.6%

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Re: US economy returned to growth last quarter, expanding 2.6%

#31

Post by conductr »

importantbrian wrote: post #6

This is the weirdest "recession" I can remember. Business leaders are constantly talking about how challenging the economic environment is and the need for layoffs etc. Meanwhile most of the underlying indicators are actually positive. Growth is strong, employment is strong. Anecdotally we're still having trouble finding good candidates. It's almost like there is a class of business leaders who are just trying to wis…

There is a class of business leader that is definitely in a recession where that word just means downward financial performance trajectory.

I’d be willing to bet the distinction is how much labor you employ and what kind (pay bands as proxy). Hospitals for example are in a world of hurt post Covid. Labor is their main cost. Rates are down but remain high. Employee satisfaction is low. Revenues do not keep pace with costs and largely uncontrollable.

Re: US economy returned to growth last quarter, expanding 2.6%

#32

Post by gretch »

jvanderbot wrote: post #5
alexb_ wrote: post #2

>Housing investment, though, plunged at a 26% annual pace, hammered by surging mortgage rates as the Federal Reserve aggressively raises borrowing costs to combat chronic inflation. It was the sixth straight quarterly drop in residential investment. Thank christ. Please bring on a housing crash ASAP.

We took a hard look at the economy before buying our house. Ultimately, we bought when interest rates were high, but prices had not yet come down. There's no crystal ball, but it sure looks like our investment will go down in value in the next few years, perhaps precipitously. I think of it this way: We bought the house we want for the price we can afford, and will happily enjoy it for two decades without price infla…

Glad you’re content. If you’re in the US, As a bonus, just remember that the US gov always does everything it can to keep housing prices stable or up. Of course it’s not an easy problem for them, but you’re in the same boat as millions of other ppl and the govt won’t let you crash out that hard.

Re: US economy returned to growth last quarter, expanding 2.6%

#33

Post by dasil003 »

glial wrote: post #26
bagels wrote: post #9

Earlier quoted context omitted.

The fed said interest rates will keep being raised until unemployment rises.

Which is so strange and violates two of their three mandates - maximum employment and moderate interest rates.

You don't want to fuck around with inflation because at a certain point it becomes a self-fulfilling prophecy (ie. merchants raise prices pre-emptively just because they internalize inflation at a high steady state).

Re: US economy returned to growth last quarter, expanding 2.6%

#34

Post by CPLX »

glial wrote: post #26
bagels wrote: post #9

Earlier quoted context omitted.

The fed said interest rates will keep being raised until unemployment rises.

Which is so strange and violates two of their three mandates - maximum employment and moderate interest rates.

So strange. It’s almost as if they’ve picked a side in the conflict between supporting labor or capital.

Re: US economy returned to growth last quarter, expanding 2.6%

#35

Post by hartator »

importantbrian wrote: post #6

This is the weirdest "recession" I can remember. Business leaders are constantly talking about how challenging the economic environment is and the need for layoffs etc. Meanwhile most of the underlying indicators are actually positive. Growth is strong, employment is strong. Anecdotally we're still having trouble finding good candidates. It's almost like there is a class of business leaders who are just trying to wis…

When you adjust for money supply inflation (peak at around 24%) instead of price inflation (peak at around 9%), every indicators become very red.

I think money supply inflation reflects more the reality and explain the current bearish sentiment.

Re: US economy returned to growth last quarter, expanding 2.6%

#36

Post by roflyear »

jvanderbot wrote: post #5
alexb_ wrote: post #2

>Housing investment, though, plunged at a 26% annual pace, hammered by surging mortgage rates as the Federal Reserve aggressively raises borrowing costs to combat chronic inflation. It was the sixth straight quarterly drop in residential investment. Thank christ. Please bring on a housing crash ASAP.

We took a hard look at the economy before buying our house. Ultimately, we bought when interest rates were high, but prices had not yet come down. There's no crystal ball, but it sure looks like our investment will go down in value in the next few years, perhaps precipitously. I think of it this way: We bought the house we want for the price we can afford, and will happily enjoy it for two decades without price infla…

Home prices, not adjusted for inflation, are fairly sticky. You may lose some money due to the loan.

Not every decision we make needs to be pragmatic. Your last comments capture this. Don't worry about it.

Re: US economy returned to growth last quarter, expanding 2.6%

#37

Post by JumpCrisscross »

hartator wrote: post #35
importantbrian wrote: post #6

This is the weirdest "recession" I can remember. Business leaders are constantly talking about how challenging the economic environment is and the need for layoffs etc. Meanwhile most of the underlying indicators are actually positive. Growth is strong, employment is strong. Anecdotally we're still having trouble finding good candidates. It's almost like there is a class of business leaders who are just trying to wis…

When you adjust for money supply inflation (peak at around 24%) instead of price inflation (peak at around 9%), every indicators become very red. I think money supply inflation reflects more the reality and explain the current bearish sentiment.

> adjust for money supply inflation (spiked at around 24%) instead of price inflation (spiked at around 9%)

The former is a fake metric. Measuring changes in the monetary base [1] is a thing. But it’s seldom accurately reflected in a single figure.

Also, the 2.6% is real GDP growth. Current-dollar growth was 6.7% annualised [1].

[1] https://en.wikipedia.org/wiki/Monetary_base

[2] https://www.bea.gov/news/2022/gross-domestic-product-third-q...

Re: US economy returned to growth last quarter, expanding 2.6%

#38

Post by bergenty »

alexb_ wrote: post #2

>Housing investment, though, plunged at a 26% annual pace, hammered by surging mortgage rates as the Federal Reserve aggressively raises borrowing costs to combat chronic inflation. It was the sixth straight quarterly drop in residential investment. Thank christ. Please bring on a housing crash ASAP.

We bought our home last month, past the peak but prices will probably drop below what we bought it for. We did buy all cash and are in this place for the long term so I don’t feel too bad besides the fact that we could have probably afforded more house for the amount we paid if we waited six more months.

Re: US economy returned to growth last quarter, expanding 2.6%

#39

Post by JumpCrisscross »

importantbrian wrote: post #28
bagels wrote: post #9

Earlier quoted context omitted.

The fed said interest rates will keep being raised until unemployment rises.

Did the fed actually say this? There were a bunch of investment bankers who did, and it seems like everyone else ran with the narrative. I haven't seen that the fed actually said it. I think all the fed cares about is bringing down inflation, but if the primary factors in inflation are supply related then unemployment doesn't have to go up for inflation to come down.

> Did the fed actually say this?

No [1].

[1] https://www.federalreserve.gov/newsevents/pressreleases/mone...

Re: US economy returned to growth last quarter, expanding 2.6%

#40

Post by tristor »

SantalBlush wrote: post #3

The EU has a similar committee to the NBER, which identifies EU business cycles. They also do not use the colloquial "2 quarters of decline in GDP" definition, though at least 2 quarters of decline is often seen in those recessions that they do identify. [0] >Most of the recessions identified by the Committee’s procedures consist of two or more quarters of declining real GDP, but declining real GDP is not the only in…

I don't need someone "official" to tell me a recession is happening. It's rather self-evident for those who are observant. Thanks, though.
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