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

221–230 of 300 posts

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

#221

Post by UncleOxidant »

dsfyu404ed wrote: post #218
theGnuMe wrote: post #145

Earlier quoted context omitted.

What is your hypothesis exactly? Are you saying those 5m folks took the 3m houses?

He's saying that while the numbers make it look like we're building homes slightly faster than the population is growing that's not the case once you count off the books immigration. So the housing deficit is getting worse, not better.

Off-the-books immigration is by definition tough to quantify. But it doesn't seem likely that illegal immigrants are either renting or buying houses in large numbers since they don't tend to have a lot of money. More likely they're doubling up with family that's already here and as such not causing a significant amount of housing demand.

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

#222

Post by allturtles »

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]

Where does this 5 million number come from? [0] estimates that the net change in illegal immigrant population in the U.S. since 2019 is close to 0.

[0]: https://cis.org/Report/Estimating-Illegal-Immigrant-Populati...

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

#223

Post by darawk »

thfuran wrote: post #176
darawk wrote: post #129

Earlier quoted context omitted.

That isn't quite right. What it implies is that debt service is a significant fraction of their margins, which is a subtle but actually quite significant difference. If a grocery store makes 1% profit on each item it sells, and its debt service cost is 1% of its revenue (making it roughly "1% of its cost") a doubling of debt service cost wipes their margin to zero.

But only requires 1% increase in revenue to sort out.

No! A 1% increase in revenue in this situation does make you profitable again, but only barely, and only with some possibly invalid assumptions.

Say you make $100 in revenue and $1 in profit, and $1 of your $99 in costs is debt service. Your debt service increases to $2, your profit drops to zero.

Now your revenue increases to $101, presumably your debt costs stay fixed (this is not a guarantee - revenue expansion costs money), but your non-debt-service costs scale as well, and they are now 0.98 * $101 + $2 in debt service = $101.98. Congratulations, your profits are positive again, but they are $0.02.

I am eliding here the general difference between fixed costs and variable costs, and so it's probably not true that your costs would scale quite this much with revenue, but it's much closer to the truth than that you'd be back where you started, esp. in a low margin business.

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

#224

Post by LUmBULtERA »

keester wrote: post #204
vikingerik wrote: post #199

Earlier quoted context omitted.

That's exactly what I'm talking about. Don't look at year-over-year numbers, you're falling for the illusion. A rent jump of 20% for 2022 is because rents were artificially suppressed in 2020 and 2021. The right comparison is to look at 2022 compared to 2019 and see if it looks out of line for a three-year period. A few things are, but most aren't. Also, citing one grocery chain is a cherry-picked outlier. Cite them…

rent did not go down in 2020

It went down significantly in 2021 for me. Though it popped back up a lot in 2022 if we signed a new lease (did not).

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

#225

Post by vikingerik »

RoddaWallPro wrote: post #214
vikingerik wrote: post #199

Earlier quoted context omitted.

That's exactly what I'm talking about. Don't look at year-over-year numbers, you're falling for the illusion. A rent jump of 20% for 2022 is because rents were artificially suppressed in 2020 and 2021. The right comparison is to look at 2022 compared to 2019 and see if it looks out of line for a three-year period. A few things are, but most aren't. Also, citing one grocery chain is a cherry-picked outlier. Cite them…

That is _not_ exactly what you are talking about: food prices do not normally go up 24% a year. Rent prices do not normally go up 10-15% a year. If their number is cherry-picked, give a real number yourself. Anecdotally, my grocery bills are easily 30%+ from what they were last year, and the same is true for many people I've asked.

That's still what I'm talking about. Any number you're looking at that's "in a year" is falling victim to the time-shifted demand effects from the pandemic.

Compare 2022 to 2019 and look for the average change over three years. That's the real signal over the temporary noise. There are still some real effects, but it's much smaller than all the one-year-over-year numbers seem to indicate.

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

#226

Post by dfxm12 »

com2kid wrote: post #187
vikingerik wrote: post #136

Earlier quoted context omitted.

There never was a real recession - it's an artifact of year-over-year numbers that were so skewed from pandemic effects. Pent-up consumer demand shifted much activity from 2020 into 2021. This is the source of all the apparent weirdness. Every yearly number in 2021 looked great thanks to comparing an artificially high number to an artificially low 2020 baseline. Then every yearly number from 2022 looks terrible, beca…

> The inflation of 2022 is also largely an illusion - it's really just that a few percentage points of what should have been normal inflation in 2020 and first-half 2021 was time-shifted into 2022. Food prices are up 48% at the nations second largest grocery chain. Rent prices are now through the roof, 20-30% year over year increases are common in major cities. Things are more expensive, full stop, and it isn't just…

Look at their profits. This is a symptom of greed more than inflation.

Recent research illustrates these inflationary-profit trends, in particular busting the myth of a wage-price spiral driven by increased worker incomes. Over 53% of price increases in the last two years have been driven by profit margin gains

https://www.forbes.com/sites/errolschweizer/2022/05/10/how-w...

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

#227

Post by nigrioid »

lame-robot-hoax wrote: post #164
JPKab wrote: post #118

"The U.S. economy grew at a 2.6% annual rate from July through September," Annual rate. That means the AP headline is deceptive, because it actually grew .6 percent. Capital is getting more expensive. Of course a recession is inevitable. I really hate the partisan capture of once neutral newsrooms. The headline is deceptively optimistic.

So when they report on inflation (which is always portrayed in annual terms, not month over month), are they being overly pessimistic?

Still optimistic.

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

#228

Post by Aunche »

aschearer wrote: post #212
Aunche wrote: post #107

Earlier quoted context omitted.

Unlike smooth talking politicians, the Federal Reserve actually tries to be honest about the effects of their policies. This is something that should be applauded, not exploited as a means to get political capital.

I'm not sure why you think this is true. For month's Powell has been shifting the narrative. First it was under control, then it was a soft landing, now it's going to be a rough landing. What'll it be tomorrow? I don't think they're being dishonest. I think they're constrained in how forthright they can be, lest they trigger a market reaction.

> I think they're constrained in how forthright they can be, lest they trigger a market reaction.

This is why I said that they try to be honest. Doctors are also inclined to err on the side of optimism when they are uncertain. The difference is that nobody is making conspiracy theories about doctors actually wanting to make their patients sick.

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

#229

Post by floxy »

vikingerik wrote: post #199
com2kid wrote: post #187

Earlier quoted context omitted.

> The inflation of 2022 is also largely an illusion - it's really just that a few percentage points of what should have been normal inflation in 2020 and first-half 2021 was time-shifted into 2022. Food prices are up 48% at the nations second largest grocery chain. Rent prices are now through the roof, 20-30% year over year increases are common in major cities. Things are more expensive, full stop, and it isn't just…

That's exactly what I'm talking about. Don't look at year-over-year numbers, you're falling for the illusion. A rent jump of 20% for 2022 is because rents were artificially suppressed in 2020 and 2021. The right comparison is to look at 2022 compared to 2019 and see if it looks out of line for a three-year period. A few things are, but most aren't. Also, citing one grocery chain is a cherry-picked outlier. Cite them…

Prices of used cars:

https://www.cargurus.com/Cars/price-trends/

...you can select the start date for the chart as early as August of 2010. Price increases starting in late 2020 don't look illusory to me.

Post reply on HN