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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%

#81

Post by treeman79 »

datadata wrote: post #14
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…

The issue is that the definition of a recession is vague, subjective, and as a term has become so politically important. If the definition was objective, verifiable, etc, then there wouldn't be room for the idea of political manipulation. I wish that society would not place such high value on terms that are so murky. It encourages discourse where the truth is not important.

It’s been 2 quarters of negative growth for decades. You can find videos of every politician on both sides saying that.

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

#82

Post by everybodyknows »

Enginerrrd wrote: post #41
SantalBlush wrote: post #21

Earlier quoted context omitted.

This 2.6% figure is real GDP, meaning it's adjusted for inflation. [0] [0] https://www.bea.gov/news/2022/gross-domestic-product-third-q...

Assuming inflation is being calculated accurately...

There is no "accurately", because there are many measures of inflation, each with its own particular claim to verisimilitude.

So any economic figure described as "adjusted for inflation" should taken with an extra measure of wariness.

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

#83

Post by [deleted] »

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…

[deleted]

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

#84

Post by tomtheelder »

importantbrian wrote: post #70
nostrademons wrote: post #49

Earlier quoted context omitted.

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.

You're totally right that business can thrive in a high rate environment, but we have a LOT of them right now whose existence has been sustained due to the low rates, extending all the way down to proper zombie companies. A lot of those will be killed by rate hikes, but that's actually a good thing in the long run.

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

#85

Post by roflyear »

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…

It's not a boolean answer. Businesses have the capacity to respond without completely going out of business.

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

#86

Post by UncleOxidant »

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…

> a class of business leaders who are just trying to wish a recession into existence, and I can't figure out why

There's also a 'class' of political leaders (primarily the party out of power) that is trying to give the impression that we're in a recession in order to help their party in the mid-term elections.

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

#87

Post by function_seven »

importantbrian wrote: post #70
nostrademons wrote: post #49

Earlier quoted context omitted.

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.

Those businesses were the ones that were either created in that environment, or who survived it long enough. The last time rates were this high, they were this high for decades.

I fear the cliff scenario because a lot of business models now were built on a foundation of crazy-cheap debt. The tide is about to go out. Eventually the business environment will re-adjust to the new cost of money, but the transition will be tough.

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

#88

Post by bumby »

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…

>many of them know that they can't survive at 2% rates, let alone 5 or 10% rates.

From your perspective, what is the underlying reason they cannot survive without excessively low rates?

Your last statement feels like it's primed to hold the Fed hostage, which is worrisome.

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

#89

Post by colinmhayes »

importantbrian wrote: post #48
rendang wrote: post #24

Earlier quoted context omitted.

Another piece of the puzzle is the big drop in labor productivity lately - https://fred.stlouisfed.org/series/OPHNFB . Could the data you mention be explained by workers previously being in jobs where they were unproductive, being laid off but then quickly reabsorbed by the hot labor market into more efficient lines of work?

Isn't that just because of the steep rise in labor costs? It's just another sign of how strong the labor market is right now.

labor productivity is measured in output/hour, not output/dollar spent of wages.

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

#90

Post by aschearer »

itsoktocry wrote: post #78
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…

> 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 I think people's sense of timescale is off. Business leaders are talking about things that we likely won't see for months. This isn't rocket science; we have insane inflation, rising interest rates, a strong USD and tightening monetary policy around…

Have you considered that "things are terrible" might benefit one or the other party during the upcoming election?
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