US economy returned to growth last quarter, expanding 2.6% • Hacker News Board

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

#231

Post by importantbrian » Thu, Oct 27, 2022, 7:41 PM UTC

pclmulqdq wrote: post #215

importantbrian wrote: post #75

Earlier quoted context omitted.

This may just be a localized thing, but housing construction here is not slowing down. My in-laws own a construction business and they're the busiest they've ever been. Their biggest challenge is hiring and getting supplies.

I think there are signs that the economy is balakanizing, and that is not a good thing. We see the same thing near us: construction and landscaping are booming. In some other places, I hear that there is no work in that profession. The same appears to be happening to companies, with Facebook down 20% today while oil companies see no signs of recession.

Facebook probably isn't the best example. They're down because they've made some really awful business decisions. I don't think their issues are the result of larger economic headwinds.

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

#232

Post by PubliusMI » Thu, Oct 27, 2022, 7:43 PM UTC

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…

No post body was provided.

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

#233

Post by aeternum » Thu, Oct 27, 2022, 7:44 PM UTC

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…

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The population pyramid matters quite a bit. Increased working-age population generally pushes prices down thus in most cases immigration reduces housing cost and inflation by decreasing labor costs.

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

#234

Post by Kye » Thu, Oct 27, 2022, 7:59 PM UTC

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.

There's a reason margins are what they are in a competitive market. "Your margin is my opportunity," as Lord Bezos famously said. Only companies that have captured their market get to raise prices to cover new costs, and all it does is induce people who want to own that margin to find flaws in the business model. This is how Netflix wrecked Blockbuster, and how Amazon killed off chain bookstores.

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

#235

Post by AtlasBarfed » Thu, Oct 27, 2022, 8:00 PM UTC

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 Elite are drunk on PPP money printing, and don't want to downsize. Meanwhile inflation means all your employees expect a 10-15% raise to keep up with higher costs, and paying your employees is verboten in the religion of American Capitalism.

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

#236

Post by signatoremo » Thu, Oct 27, 2022, 8:03 PM UTC

jandrese wrote: post #202

seanmcdirmid wrote: post #190

Earlier quoted context omitted.

> Unbelievably credulous predictions that the Chinese government is going to topple on its own in the next few months are just plain out of touch. Isn't that just a straw man? Most serious reporting on China are just predicting a substantial slow down in growth (or even recession), which is what is playing out right now. Chinese emigration rates, which were dropping for many years before, are actually growing again (…

You would think so, but the stories are being repeated a lot in the news: https://news.google.com/search?q=china%20government%20collap... https://www.youtube.com/results?search_query=china+collapse A slowdown is inevitable. The "china miracle" was loads of debt fueled spending to pump the books, but they still have 1.4 billion people who are still near the bottom of the S curve for domestic consumption. Even the dubi…

Not a single link on that search, the first page at least, says the Chinese government is going to topple on its own.

I have never read a mainstream article that says China will collapse. They are a juggernaut that will continue to achieve impressive goals. What seem to be agreed is that they will face significant challenges, and overtaking the US is not a foregone conclusion.

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

#237

Post by mensetmanusman » Thu, Oct 27, 2022, 8:04 PM UTC

There is less stuff to buy, demand remained high due to stimulus, prices rise accordingly, huge amounts of boomer retirements line up to keep unemployment low, record high corporate profits, economy growing… this is like a boom and a bust at the same time.

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

#238

Post by bumby » Thu, Oct 27, 2022, 8:05 PM UTC

bryanlarsen wrote: post #219

nightski wrote: post #192

Earlier quoted context omitted.

The data just does not seem to line up with your assessment. Labor force participation rate is down 1% since pre-pandemic. It's not earth shattering, but it is quite a drop. Also inflation is hardly a few percentage points of catch up. Look at the chart below and tell me you still believe that. https://www.bls.gov/charts/consumer-price-index/consumer-pri... Not to mention food/gas is worse which is what hits people i…

LFPR is up for people under 50. The drop in overall LFPR can be almost entirely attributed to the drop in immigration during the pandemic.

>overall LFPR can be almost entirely attributed to the drop in immigration during the pandemic.

I just heard a report this morning that there was a very real labor participation rate drop among women, particularly with working mothers. How does your immigration hypothesis align with that? Is it that child care work is primarily driven by immigrant workers? Or is it that other groups more than make up for that in the general statistic?

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

#239

Post by Kye » Thu, Oct 27, 2022, 8:05 PM UTC

trentgreene wrote: post #125

JPKab wrote: post #122

Earlier quoted context omitted.

Debt servicing is a constant thing for businesses to be able to make payroll and acquire inventory for later resale or processing. Based on your thoughts here I'm going to assume you haven't worked at a small business before. If you have it must have been awesome to work at a place that didn't have to borrow money constantly.

I've worked in small start ups before, but all boot strapped out of pocket / revenue. Wouldn't having to borrow money constantly be a red flag that the business is bad / not profitable?

Being able to is actually a green flag. Banks wouldn't keep lending it if the companies didn't pay it back. This isn't VC we're talking about here.

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

#240

Post by mensetmanusman » Thu, Oct 27, 2022, 8:05 PM UTC

dfxm12 wrote: post #226

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…

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...

May be greed, or may be because of regulatory capture. I.e. it is incredibly expensive to start a company due to all the requirements that the companies that do exist can continue to raise prices with no competition.