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

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

#251

Post by banannaise » Thu, Oct 27, 2022, 9:09 PM UTC

jfengel wrote: post #149

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…

The reversals in the housing market will be unpleasant, but they go hand in hand with all of the overpriced housing we've had for the last decade. The Fed failed to follow its own policy, of taking the punch bowl away when the party gets going. It allowed the economy to heat up for too long, and thus the inevitable reversals. Averaged over a few decades it will be the same 3-4% GDP growth that we would have gotten if…

I hate the use of the term "housing" when what we mean is "land". Building materials haven't gotten obscenely more expensive. Building labor hasn't gotten obscenely more expensive. Land has gotten obscenely more expensive.

We are also reaching a point where consumers drive the price of residential land less and less. How much difference does the mortgage rate make when the market is increasingly driven by commercial buyers, who don't use mortgages?

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

#252

Post by rendang » Thu, Oct 27, 2022, 9:12 PM UTC

yodsanklai wrote: post #246

rendang wrote: post #29

Earlier quoted context omitted.

In the US? Prices from 2011-2016 or so were not that bad, and were lower than 2006 in many cities.

Paris Steady growth since 1998 https://parispropertygroup.com/blog/2017/how-paris-real-esta...

Ah, not surprising, considering it's one of the most desirable places to live in, and you are competing with a growing global rich class to live there.

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

#253

Post by caycep » Thu, Oct 27, 2022, 9:13 PM UTC

vikingerik wrote: post #136

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…

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 problem is that it is in the political interests of a lot of groups that many people believe it...

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

#254

Post by lamontcg » Thu, Oct 27, 2022, 9:36 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...

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

Inflation is just a rise in prices. Literally just defined as a rise in prices. It doesn't matter if the prices accurately reflect rising costs of doing business or wind up in profits.

Inflation is more about the ability of consumers to continue to pay higher prices and the inelastic demand for whatever the good is. The market is fundamentally an auction and prices get bid up until elastic demand starts to appear.

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

#255

Post by pixelatedindex » Thu, Oct 27, 2022, 9:47 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…

[flagged]

> it’s insane to me that nobody is connecting the two, but in the past two years we’ve let in ~5 million illegal immigrants and built ~3 million homes.

What is the connection here? And why is there a qualification of "illegal"? If these were legal immigrants, what would that change?

You're implying that demand is greater than supply, which has been quite overtly mentioned by many.

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

#256

Post by TexanFeller » Thu, Oct 27, 2022, 10:53 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...

Ask yourself why all of these companies were not greedy in previous years, and how it happened that they all became greedy at approximately the same time. The answer is that this line about greed is political propaganda you’ve been fed. The companies involved were merely responding to market forces as they always do, /for example:

1) Near zero interest rates during the pandemic - technically set by the Fed, but under obvious political pressure to do it from both the former and current administrations.

2) Helicopter money from the government. I’m not just talking about the one time checks that people use as a strawman to attack as an inflation cause. There were student loan pauses, 300/mo per child credit(they tried to make it permanant!), and more. The fact that much of the money actually went to younger or poorer folks, which we celebrate, probably also drove inflation much more than money going to rich people, because the poor and the young are the most likely to immediately spend it. Lots of pandemic loans given to businesses too with little to no oversight too.

3) Supply side constraints due to shutdowns at suppliers overseas.

4) Demand side rebound demand for things people avoided or weren’t allowed during the pandemic.

Much of this is likely attributable to government policy, so I blame our political class.

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

#257

Post by justin66 » Thu, Oct 27, 2022, 11:02 PM UTC

nobody9999 wrote: post #168

justin66 wrote: post #144

Earlier quoted context omitted.

There is (was, really) an argument in the public sphere as to whether the inflation we're experiencing is merely "transitory," and this plays into the larger debate about how it ought to be dealt with by the Fed and the US government. Use of the word "chronic" is merely someone noting their position on the question of whether our inflation is "transitory." edit: looking at it in context, it's someone noting the Fed's…

A fair point. Although I'd posit that there are a bunch of terms that (at least IMHO) would be more appropriate than "chronic": Ongoing Sustained over the past 18 months Recent and continuing I'm sure I could come up with a bunch more, but since my comment should really be directed at the Associated Press (AP) and not GP, and I'm sure the AP doesn't care what I think about their choice of adjectives, I guess it's not…

"Ongoing" serves as a poor rebuttal to "transitory" (something can be transitory and nevertheless ongoing, and the whole point is that we know it's no longer considered transitory) and the others are obviously clunky when you're just trying to imply a minor point. I think you're on your own with this one and the AP did okay, even if I might have phrased it differently.

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

#258

Post by ac29 » Thu, Oct 27, 2022, 11:10 PM UTC

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…

> Food prices are up 48% at the nations second largest grocery chain.

This is a very specific claim to be completely unsourced. What is the chain, and what is the time period you are referring to?

The latest CPI [0] has food prices up 11.2% over the past 12 months, so 48% would be more than just an outlier.

[0] https://www.bls.gov/cpi/home.htm

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

#259

Post by rufus_foreman » Thu, Oct 27, 2022, 11:13 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…

>> Meanwhile most of the underlying indicators are actually positive

That's not what I'm seeing. There's a good summary from earlier this week at https://seekingalpha.com/article/4548245-weekly-indicators-s...

Employment is the only indicator that is still positive, everything else is either neutral or pointing to a recession.

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

#260

Post by Enginerrrd » Thu, Oct 27, 2022, 11:15 PM UTC

fortuna86 wrote: post #117

Enginerrrd wrote: post #41

Earlier quoted context omitted.

Assuming inflation is being calculated accurately...

You seem determined to find a way to discredit this figure.

Me with my one comment? Not at all, but there seems to be a lot of skepticism over official inflation figures, particularly for recent reporting.

Given there's usually a fairly significant magnitude of the variation on inflation figures depending on the exact methodology, I'd expect a similar magnitude for inflation-adjusted GDP no?