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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%

#61

Post by colordrops »

spaceman_2020 wrote: post #52
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…

The world is wacky right now. Normal patterns of behavior have been disrupted by 2 years of lockdowns. Some people are spending out of spite. Some people are not even leaving the house. There's a certain levity about work - no one seems to be taking it seriously. Strange times. Really hard to capture in data. Only increases possibilities of a major economic catastrophe because the tea leaves are just too hard to read…

> There's a certain levity about work

Where do you work? For the two companies I've worked at during this period I would not use the term "levity".

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

#62

Post by Eumenes »

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…

Sounds like a conspiracy theory on your end

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

#63

Post by JumpCrisscross »

hartator wrote: post #45
JumpCrisscross wrote: post #37

Earlier quoted context omitted.

> 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-d…

> the former is a fake metric. I am using M2 money supply. Basically trying to proxy how much money more we printed this past few years. Source: https://www.longtermtrends.net/m2-money-supply-vs-inflation/

> am using M2 money supply

It makes no sense to use a November 2020 rate of change in M2 to adjust a Q3 2022 real GDP estimate. GDP is a production metric. An output of the real economy. M2 is a monetary metric. An input into the financial system. To the degree their relationship has meaning, it’s as a rough measure of financialisation [1].

[1] https://data.worldbank.org/indicator/FM.LBL.BMNY.GD.ZS?most_...

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

#64

Post by metapsj »

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.

maximum employment is a pandemic period objective. they aren't intending to crush the labor market. the fed has largely behind the curve in addressing inflation.

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

#65

Post by teeray »

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.

> Please bring on a housing crash ASAP.

IMO, there’s too many people making this bet for it to actually manifest. Not sure exactly how it’ll happen, but I can’t help but think banks are eyeballing those war chests people have saved up for crash. They’d much rather those as rent payments than interest payments.

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

#66

Post by jandrese »

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.

Supposedly the car market is about to crash as well. There was supposedly 2008 like shenanigans in the auto lending segment and the crows are coming home to root.

Speculation is that people were buying cars they couldn't afford using the stimulus checks as the downpayment and then immediately asking for a halt on payments due to COVID. With both factors no longer in play people can't afford their cars and are defaulting. This should cause a massive wave of repos and a flood in the used car market.

That said, the market can stay irrational longer than you can stay solvent. Car lot managers will be in denial for some time before they actually lower prices to where they should be.

I suspect there is some chunk of the economic doomsaying that is literally political propaganda. A recession is bad for the party in power and a lot of the economic catastrophe drumbeat started around the time early polls opened up.

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

#67

Post by rhino369 »

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.

>Please bring on a housing crash ASAP.

The best outcome is probably just nominal value stays relatively steady while real value declines after factoring in inflation.

You don't want people massively underwater on their mortgages.

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

#68

Post by jandrese »

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…

Look at it this way: you are missing out on 25% rent hikes.

https://thehustle.co/why-is-rent-skyrocketing/

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

#69

Post by brink »

jopsen wrote: post #46
brink wrote: post #22

Earlier quoted context omitted.

Don't worry, population collapse will fix this in another ~20-30 years. You'll get there.

The US might just ease up on immigration. There is no shortage of people willing to start a new life in the wealthiest economy on the planet. The end of population growth is certainly going to shake things up -- but who is to say how policies won't change to accommodate the new reality.

Yeah, my wife is an immigrant and the US government makes its best efforts to make immigration as nightmareish as possible. I'll be the first to say the immigration system is broken and needs to be fixed.

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

#70

Post by importantbrian »

nostrademons wrote: post #49
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…

The stock market, interest rates, and advertising spending are leading indicators, while unemployment is a lagging indicator. Business leaders know the financial structure of their company, and many of them know that they can't survive at 2% rates, let alone 5 or 10% rates. The gloom from business leaders is forward-looking. They're fine for now , while consumer spending holds up and they can run on old debt. But as…

This seems overly pessimistic. I'm sure a high rate environment isn't ideal for a lot of businesses, but we've had much higher rates in the past and most businesses survived it just fine.
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