Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

US economy returned to growth last quarter, expanding 2.6%

apnews.com

Post reply on HN
Print view View original

151–160 of 300 posts

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

#151

Post by lotsofpulp »

cwkoss wrote: post #131
subsubzero wrote: post #60

Earlier quoted context omitted.

It is weird, they say history does not repeat but it rhymes. What is troubling about this good news about GDP growth is the fed's course of raising interest rates will continue on and interest rates will keep getting higher and higher. This will lead to a housing market that will grind to a halt and expect that whole sector will hemorrhage jobs. In addition growth companies will be hit hard by rates being high as we…

Perhaps the housing market is obese from low interest rates, and will be healthier after a bit of dieting. Society would be healthier if the housing market wasn't managed to be a retirement fund. Would likely end homelessness.

I keep reading this house as a retirement fund comment online, and I have no idea what it means.

Are reverse mortgages a common part of people’s retirement?

https://www.urban.org/urban-wire/reverse-mortgage-use-differ...

> At a time when seniors are sitting on a mountain of housing wealth and have anxiety about their finances, this should be a well-used program. Instead, despite rising senior population, participation decreased between 2011 and 2018, from 73,112 to 33,000 mortgages.

Does not seem like a popular part of peoples’ retirement plans. Even downsizing a house does not seem like it would yield enough of a profit to be a major component of retirement, unless you go from super popular area to middle of nowhere. But I doubt that is people’s retirement plan either.

https://fred.stlouisfed.org/series/MSPUS

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

#152

Post by ipaddr »

rendang wrote: post #24
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…

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?

That's people going back into the office and lowering production

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

#153

Post by mgamache »

The Yield curve, Mortgage Rates, Bonds and Asset Prices are all in bad shape. Combined with rapidly falling income (due to 15%+ real inflation) it's a disaster in the making. Homes will likely fall 30-35% in adjusted value in the next 12 months. A lot of people's net worth is in their homes. This will be the largest post WWII drop in home prices. Don't forget the strong dollar is crushing economies around the world, who are our trading partners (and creditors).

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

#154

Post by importantbrian »

onlyrealcuzzo wrote: post #138
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…

Is there any indication that ad spending LEADS consumer spending? I can't imagine why anyone would turn down ads while ROAS is blazing. Marketers / ad people - is this common? If so, why?

This. As someone who analyzes ad spend as part of their job I cannot imagine a scenario in which we would turn down ad spend prior to a downturn in consumer spending? If we're getting good ROAS we aren't turning off the hose.

To give OP the benefit of the doubt. Maybe what OP means is that Ad Spend is one of the first lagging indicators to show up. Consumer demand weakens, companies turn down ad spend, and then a few months later the reduction in revenue shows up in the quarterly report. So as an indicator it leads earnings reports and share price drops but lags actual consumer spending.

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

#155

Post by function_seven »

lotsofpulp wrote: post #99
function_seven wrote: post #87

Earlier quoted context omitted.

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…

What rates are you referring to? https://fred.stlouisfed.org/series/fedfunds Last time fed funds rates were as high as they are now was Jun 2019. And then a few more times before that.

Look at the 3-month (90-day) commercial paper rates. They're split into different data sets on the FRED site[0][1], changing in 1997.

I combined them into a single chart here: https://ibb.co/h7c7DJS

(Is ImgBB a good site? I stopped using imgur after too many dark patterns)

[0] https://fred.stlouisfed.org/series/WCP3M

[1] https://fred.stlouisfed.org/series/DCPF3M

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

#156

Post by Aunche »

CPLX wrote: post #34
glial wrote: post #26

Earlier quoted context omitted.

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.

So the low interest rates for the past decade that reduced unemployment must mean that they love labor right?

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

#157

Post by vkou »

kyleyeats wrote: post #126
roflyear wrote: post #103

Earlier quoted context omitted.

Everything is a conspiracy.

No, everything is 40% more expensive.

Houses aren't. :)

(Inflation watchdogs only come out when he price of butter rises, not when the price of their house does...)

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

#158

Post by UncleOxidant »

Auracle wrote: post #133
UncleOxidant wrote: post #102

Earlier quoted context omitted.

Mortgage rates at 7% is pretty much the average mortgage rate going back 70 years or so. We're basically at the average mortgage rate now. The Fed screwed up by keeping rates too low for too long which juiced home prices such that a huge chunk of people who would like to be able to buy a home are priced out of the market. The problem, though, is that home building needs to continue in order to improve the housing sup…

[flagged]

Without all that immigration it would cost a lot more to build houses.

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

#159

Post by mise_en_place »

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 is a very spot on analysis. I was wondering why the stock market keeps closing green, when high interest rates discount future values/cash flow. You'd expect it to close red, but as you mention the markets are hoping for a Fed pivot. It is effectively a soft pivot by the Fed.

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

#160

Post by adam_arthur »

mgamache wrote: post #153

The Yield curve, Mortgage Rates, Bonds and Asset Prices are all in bad shape. Combined with rapidly falling income (due to 15%+ real inflation) it's a disaster in the making. Homes will likely fall 30-35% in adjusted value in the next 12 months. A lot of people's net worth is in their homes. This will be the largest post WWII drop in home prices. Don't forget the strong dollar is crushing economies around the world,…

The Fed has two choices.

They either need to engineer a quick and sharp recession, or give up the inflation fight and drop short term rates.

With option one the US can fund debt liabilities on the long end. With option two, the short end.

Otherwise the US government will become insolvent within a few years. To me it’s clear they’re choosing option one.

Post reply on HN