US Second Quarter GDP Accelerates to 4.1%

[louis c]

Source: Market Watch

WASHINGTON (MarketWatch) - U.S. economic growth accelerated to an annual rate of 4.1% in the second quarter, compared with a revised 2.2% in the first quarter, the Commerce Department said Friday. This is the fastest rate of growth in almost four years. The second quarter gain was close to the 4.2% rate economists surveyed by MarketWatch had forecast. The acceleration of real gross domestic product in the second quarter reflected a jump in consumer and government spending. The trade sector boosted GDP but this was offset by a downturn in inventory investment. Real final sales for domestic purchasers, which excludes trade and inventories, rose 3.9% in the second quarter after a 1.9% gain in the prior quarter.

Read more: https://www.marketwatch.com/story/us-second-quarter-gdp-accelerates-to-41-annual-rate-2018-07-27

[NewJeffCT]

1. some of that is offset by rising inflation

higher gas prices and higher healthcare costs

[pazzyanne]

3. Don't forget rising grocery prices.

Mine has gone up about 20% in the last year.

[Fred Sanders]

8. Minus 3% inflation, the title forgot that? Like where wage growth is up 2.8% but it is not...

Down 2%.

Apparently the I word shall not be mentioned until later, and certainly not in any headlline.

By the way Venezuela economy grew 10000% leaving America in the dust....Never mind inflation is 20000%.

[FBaggins]

76. Headline GDP figures are "real"

Meaning net of inflation.

[jmowreader]

13. No, it's accounted for by rising inflation

GDP is all about money changing hands. If the price of a frammis doubles and sales don’t fall by 50 percent in response, the frammis maker gets to report increased sales to the government.

[progree]

46. These are real GDP figures, meaning inflation-adjusted. Current-dollar aka nominal increased 7.4%

annual rate.

Real gross domestic product increased at an annual rate of 4.1 percent in the second quarter of 2018
(table 1), according to the "advance" estimate released by the Bureau of Economic Analysis.

...Real values are inflation-adjusted estimates—that is, estimates that exclude the effects of price changes.

...Current-dollar GDP increased 7.4 percent, or $361.5 billion, in the second quarter to a level of $20.4
trillion.

https://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

[NewJeffCT]

52. Thanks

for that clarification.

[Bengus81]

58. Not supposed to talk about gas prices that are 65 cents per gallon higher here......

Than when Shitler took office. Those pump prices cost most people more than his BS tax cut will ever give them back. It cost me almost $14.00 more per week to fill up than in Jan 2017.

[Trust Buster]

2. Bad news for the midterms.

[Loki Liesmith]

4. Won't matter

[Trust Buster]

7. Please, a 4% GDP is spectacular. No getting around that.

[louis c]

16. That's a quarterly rate

First quarter was 2.2% and the 4.1% was a reflection of the corporate welfare tax cut. The next quarter, which will come out just before the mid-terms, will return to a more moderate number, probably around 2.5%.

[Trust Buster]

19. I know it's a quarterly rate. I hope next quarters figures are lower.

But, the favorite number coming from the lips of Republican politicians between now in the elections will be “4%”. We just can’t seem to win for losing no matter how bad the deplorables behave.

[Loki Liesmith]

24. It won't matter

Link to tweet

?s=21

[True Dough]

31. I hate to say I agree,

but I agree. I still hope Trump goes down in flames, of course, but this economic strength is good fodder for the ReThugs.

[Loki Liesmith]

33. "Dems are screwed..."

Link to tweet

?s=21

[watoos]

34. As the poster stated

this number was artificially created by the tax cuts. The longer this GOP economy goes the worse it is going to get.
Trump needs high GDP numbers to pay for those tax cuts. The deficit has already doubled under Trump to over 800 billion and projected to reach over a trillion dollars next year.

I look at income inequality, which is widening, wages are stagnant, all signs that were similar right before the Great Depression.

[machoneman]

69. I think they goosed the numbers, knowing the next report will be bad.

Yeah, I know the WH has little sway here on the stats but I'm still very suspicious! Just watch when the 4.1 is revised downwards just before the next quarterly report to say 3.5% and then the boom fall with a mealsy 1.5% third quarter.

Know what else will happen? Trump will cry foul, say the 4.1% was correct and the 1.5% gain was wrong and way too low!

[onenote]

63. Hoping for the economy to get worse isn't a winning political strategy

[Trust Buster]

64. It was for the Republicans.

[mahatmakanejeeves]

36. It's an annual rate, based on the way the second quarter proceeded.

U.S. economic growth accelerated to an annual rate of 4.1%....

Note as well that this is an advance estimate. The figure is subject to revision in another month.

What this means is, if the number is right (not revised up or down in another month), and the economy grows throughout the year at this rate, the annual rate of growth will be 4.1%. The U.S. GDP is not growing at a 16% annual rate.

Think of it like this: if you bought a share of stock for $100 on December 31, 2017, and it was worth $101 on March 31, 2018, it would have increased in value at an annual rate of 4%. Extending its growth, you would expect it to be worth $104 on December 31, 2018. It was up only 1% in the first quarter of 2018, but that rate of growth, annualized, comes out to 4%.

National Income and Product Accounts
Gross Domestic Product: Second Quarter 2018 (Advance Estimate), and Comprehensive Update

Real gross domestic product increased at an annual rate of 4.1 percent in the second quarter of 2018 (table 1), according to the "advance" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 2.2 percent (revised).

The Bureau emphasized that the second-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see "Source Data for the Advance Estimate" on page 2). The "second" estimate for the second quarter, based on more complete data, will be released on August 29, 2018.

The increase in real GDP in the second quarter reflected positive contributions from personal consumption expenditures (PCE), exports, nonresidential fixed investment, federal government spending, and state and local government spending that were partly offset by negative contributions from private inventory investment and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased (table 2).


....

Summary of historical updates

The picture of the economy presented in the updated estimates is very similar to the picture presented in the previously published estimates.

* For 1929–2012, the average annual growth rate of real GDP was 3.2 percent, unrevised from the previously published estimates. For the more recent period, 2007–2017, the growth rate was 1.5 percent, 0.1 percentage point higher than in the previously published estimates.

* For 2012–2017, the average annual growth rate of real GDP was 2.2 percent, the same as in the previously published estimates. The percent change in real GDP was unrevised for 2012; revised up 0.1 percentage point for 2013; revised down 0.1 percentage point for 2014; unrevised for 2015; revised up 0.1 percentage point for 2016; and revised down 0.1 percentage point for 2017.

* For 2012–2017, the average rate of change in the prices paid by U.S. residents, as measured by the gross domestic purchasers’ price index, was 1.2 percent, 0.1 percentage point lower than in the previously published estimates.

* For the period of contraction from the fourth quarter of 2007 to the second quarter of 2009, real GDP decreased at an average annual rate of 2.7 percent; in the previously published estimates, it decreased 2.8 percent.

* For the period of expansion from the second quarter of 2009 to the first quarter of 2018, real GDP increased at an average annual rate of 2.2 percent, the same as previously published.
....

[DemocratSinceBirth]

44. The number also reflected hording by some companies ahead of Trump's tariffs.

[YessirAtsaFact]

17. For a year, yes. For a quarter, no.

This is based on juicing a good economy with unnecessary tax cuts and Chinese buying soybeans ahead of the tariffs.

It isn’t sustainable.

[Snellius]

78. +1 Half of GDP growth owed to export burst to China and inventory accumulation

both caused by tariffs and temporary

[yallerdawg]

20. Actually, this is a low end number...

and with a lot of "one offs" - phenomenal soybean sales and inventory sales ahead of trade wars - this is nothing for Republicans to brag about.

But they will.

Next GDP report will be down - just ahead of elections!

[Trust Buster]

23. They will brag about 4%. We would brag about 4% if we held power. Low end number ?

[yallerdawg]

28. Forecast was 4.4%, the Dotard dropped hint at 5. yesterday...

some forecasts predicted up to 10%!

Surprisingly close to a disappointing 3% plus number!

Yeah, 4.1 is at the low end of expectations!

Pre-markets fairly unimpressed so far.

[louis c]

29. Just for some historical perspective, Obama's GDP growth was larger in 2014

President Obama had a 4.6% GDP growth in the second quarter of 2014 and a 5.2% GDP growth in the third quarter, just before the 2014 mid-terms. In addition, he had no scandals. We still lost seats in the House and Senate.

Just stating facts.

link;
https://www.statista.com/statistics/188185/percent-chance-from-preceding-period-in-real-gdp-in-the-us/

[DemocratSinceBirth]

43. Check out post 41

https://www.democraticunderground.com/?com=view_post&forum=1014&pid=2120296

[louis c]

54. My post came in 30 minutes earlier, but I agree

[DemocratSinceBirth]

55. louis, 3rd quarter gdp in 1992 was 3.74%

Bush Pere won 37% of the vote.

[louis c]

57. I understand

but 2014 is more convincing, since we are heading into a mid term election and it was only 4 years ago, so we are measuring 90% of the same voters and all the same congressional districts.

[DemocratSinceBirth]

61. IMHO elections are more about the Zeitgeist and less about this or that metric

The Zeitgeist in 1992 was that America was clearly ready for a change as it was in 06, 08 and 010 when the incumbent party got shellacked.

[SunSeeker]

68. Exactly. nt

[qazplm135]

42. it was when we held power in 2014

same time, better number...guess what happened during the midterms.

[Loki Liesmith]

21. It won't matter

1) a quarterly rate

2) nobody votes on statistics they’ve never heard of.

[Bernardo de La Paz]

38. Good not spectacular. Obama did better four years ago, and not from artificial bump. . . . nt

[DemocratSinceBirth]

41. GDP grew by 4% in 1994

Why did we lose 54 House seats, 11 senate seats, and 12 gubernatorial seats in the 1994 mid terms ?


GDP grew by a "spectacular" 4.6% in the second quarter of 2014.


Why did we lose 13 House seats, 9 Senate seats, and 2 gubernatorial seats in the 2014 mid terms ?

[Bengus81]

60. Yep...thank you OBAMA for bringing us back from the brink of the Second GD for Donnie...

so he can reap the benefits. If this would have been July 2011 and Shit gibbon was Pres he wouldn't be looking at these numbers. Some had to right the ship that Bush damn near sunk for Donnie to get numbers like this.

[TomCADem]

77. For the biggest group of American workers, wages aren't just flat. They're falling.

You can’t eat GDP. If anything, GDP growth from tax cuts to the rich reinforces how America’s middle class is being ignored.

https://www.washingtonpost.com/news/wonk/wp/2018/06/15/for-the-biggest-group-of-american-workers-wages-arent-just-flat-theyre-falling/?utm_term=.366012321f91

The average hourly wage paid to a key group of American workers has fallen from last year when accounting for inflation, as an economy that appears strong by several measures continues to fail to create bigger paychecks, the federal government said Tuesday.

For workers in “production and nonsupervisory” positions, the value of the average paycheck has declined in the past year. For those workers, average “real wages” — a measure of pay that takes inflation into account — fell from $22.62 in May 2017 to $22.59 in May 2018, the Bureau of Labor Statistics said.

This pool of workers includes those in manufacturing and construction jobs, as well as all “nonsupervisory” workers in service industries such health care or fast food. The group accounts for about four-fifths of the privately employed workers in America, according to BLS.

Without adjusting for inflation, these “nonsupervisory” workers saw their average hourly earnings jump 2.8 percent from last year. But that was not enough to keep pace with the 2.9 percent increase in inflation, which economists attributed to rising gas prices.

[Yavin4]

9. People don't vote in mid terms because of GDP growth.

That's an abstract number to most people.

[BumRushDaShow]

14. GDP doesn't factor in when pocketbook issues like oil @ $70/bbl

and gasoline in the $3 - $4/gal range are in your face.

The average consumer will ask - "How is that good for me when I haven't had a raise in years?"

[hatrack]

37. The laughing gas will wear off soon enough. Meanwhile . . .

Gasoline at $3.00, diesel more like $3.25;

Last time I bought a pound of generic butter - $4.25, and milk's about $3 a half-gallon;

Insurance companies in Maryland requesting 30.2% increase in ACA rates for 2019, and 24% in New York - and that's just the beginning, thanks to Shitstain sabotaging ACA;

Jeff Sessions can't bestir himself to defend the preexisting conditions law in ACA, and it's one SC Justice away from going bye-bye;

And the "good and easy to win" trade war is just getting going.

I don't think most voters are going to give a shit about Economic Springtime For Shitler come November.

[mahatmakanejeeves]

65. "Last time I bought a pound of generic butter - $4.25...."

Try Aldi. It's $2.69, $2.79, give or take, there. I got Land O' Lake at the Giant for $2.49 during a Memorial Day weekend special.

I've seen a couple of Aldi grocery stores in the Maryland suburbs of DC, so I know they are near you.

[Igel]

70. Where I live, near Houston

gas is $2.50/gal, butter's $2.50/lb, and milk's around $2 for a half gallon. Diesel's more expensive, but I barely notice diesel prices.

I shop at Kroeger, HEB, and sometimes Walmart. Their prices aren't too out of line with each other.

That business with income, real estate taxes, etc., depending on where you live applies here. . Houston's a fairly cheap city to live in; almost any place in Maryland that's fairly built up is much more expensive.

[TexasBushwhacker]

73. $2 for a HALF gallon of milk?

I see a gallon for around $2 all the time.

I agree about Houston. When it comes to groceries, gas and real estate, it's pretty cheap to live here compared to other big cities.

[progree]

50. The 4.1% GDP rate is inflation-adjusted. The current-dollar nominal rate is 7.4%

https://www.democraticunderground.com/?com=view_post&forum=1014&pid=2120316

[BumRushDaShow]

59. But that is the equivalent to "backroom" impact

not what the average person experiences. I'm not the one talking about inflation though (which hasn't really come into play just yet).

I.e., the oil prices have generally been a combo of (my term) "artificially-generated reduced supply" and speculation. That's why the floating of the idea to tap the strategic reserve.

But here is a good graph from the site in your link -



What's most likely going to happen is a huge product "dump" at cheap prices for the consumer but then that's when you follow the futures because if this trade war continues, you are going to eventually have less product being made because you won't be able to sell it all locally.

I suppose it's time to invest in a big deep freezer (at least for food)!!!!

[progree]

62. True - almost all of the real GDP growth for decades has gone to the upper few percent

Some would say more than all. And we know that the tax cut went overwhelmingly to the top few percent, so it's more than likely that's where almost all/all the GDP growth went too.

Thanks for posting the graph -- very interesting.

[ck4829]

39. I haven't seen a cent of this hiked GDP!

Yeah, if this GDP is so great, where's my money?

This is what we need to start asking... but I feel as though we won't.

[honest.abe]

53. This wont matter unless people feel it personally

And from what I can see the economy and job situation is still not good for most Americans. Most have jobs but they dont pay well. The cost of housing is skyrocketing in urban areas. College tuition is out of reach for many. Daycare costs are outrageous. The pressures of day to day life are increasing and much of that is due to income inequality.

And usually voters blame the party in power for issues like this.. which bodes well for Democrats in the midterms.

[Hoyt]

56. I agree. If "it's the economy stupid" still holds, we'll have to get out even more votes.

It doesn't matter if Obama set the stage for this, that the tax cut will hurt us long-term, that inflation is increasing a bit, that we've made enemies with foreign countries through an America First approach, etc.

It makes it tougher and likely trump voters aren't going to care about the truth.

[empedocles]

5. 'government spending'

Key clue. Haven't seen anyone tally up the various huge costs of 'traitortrump's' disasters

[louis c]

6. I don't think this is so great

First off, this GDP number reflects a one off from the tax breaks given corporations. I don't believe this growth is sustainable, especially with the Tariff Wars that are looming.

Drudge was proclaiming a 5% second quarter growth, so 4.1% has fallen far short of the sycophants ranting's.

I would describe today's growth numbers as a "sugar high" from the corporate tax breaks. Let's see what next quarter brings.

[Watchfoxheadexplodes]

10. Cohen story gone

O boy the orange dumpling is carrying a horseshoe.

[Trust Buster]

11. The dude is lucky. 4% is something to crow about.

[Bernardo de La Paz]

26. It's an artificial bump to beat the tariffs, but he'll crow anyway.

Importing metals and exporting soybeans as fast as they could. None of that in this quarter.

[watoos]

35. Exactly

This number was artificially created.

[videohead5]

12. Wages are not going up

It's still all going to the top 1%. this is how the economy was doing. those tariffs are already hurting but it won't show up until the next quarter report.

[BumRushDaShow]

15. "it won't show up until the next quarter report."

Which will happen right before the election. All the industries (farming and manufacturing) that interconnect with each other are getting walloped right now and that $12 billion hand-out is a drop in the bucket that can't stem that tide. And even if the trade war suddenly stopped today, the contracts that were lost aren't coming back (at least right away).

[Bernardo de La Paz]

27. Real wages are going down. It's not pretty. And that's from still being down from 2006.

[jodymarie aimee]

18. fuck

thar's all....

[SunSeeker]

67. It was higher under Obama, WITHOUT inflation puffing it up.

https://tradingeconomics.com/united-states/gdp-growth

[bronxiteforever]

22. Apres moi, le deluge says King Don the Con

Or if you prefer the great Canadian songwriter
Leonard Cohen

Everybody knows the fight was fixed
The poor stay poor, the rich get rich
That's how it goes
Everybody knows

[Bernardo de La Paz]

32. I mangled those lyrics in Sep 2016

Everybody Knows the GOP is leaking, Everybody Knows the Mic was Busted

Everybody knows the 'lection is rigged
Everybody rolls with their fingers crossed
Everybody knows the debate is over
Everybody knows the orange guy lost
Everybody knows the mic was busted
The poor stay poor, the rich get rich
That's how it goes
Everybody knows

Everybody knows that the GOP is leaking
Everybody knows their candidate lied
Everybody got this horrid feeling
Like their TV or their phone just fried
Everybody talking to their sockets
Everybody wants a box of chocolates
And a Miss Universe
Everybody knows

Everybody knows, everybody knows
That's how it goes
Everybody knows

And everybody knows that it's now or never
Everybody knows that it's him or you
And everybody knows that you rule forever
Ah, when you've spun a line or two
Everybody knows Trump's deal is rotten
Old Black Joe's still pickin' cotton
For his ribbons and bows
And everybody knows



-- with apologies to Leonard Cohen

Lyrics to Everybody Knows by Leonard Cohen

Live

[bronxiteforever]

45. Awesome +1

[Roland99]

51. LOVE that song. And nice job on the "mangled" version!

[Bernardo de La Paz]

25. A lot of that bump was front-loading to beat the tariffs. . . . nt

[anarch]

30. I personally have definitely contributed to this growth

I've spent way more on food, utilities, and home improvements (well OK my air conditioner died from over-use and I had to replace it...a huge expense), and unexpected medical costs than I have for any other three months in recent memory...maybe ever. This does not give me a great feeling of confidence for the next quarter, though...

I would be interested to see this rate of GDP growth realistically indexed against inflation. This current economy doesn't exactly seem sustainable to me (certainly not on a personal level...I'm looking at a ramen-based diet for the rest of the year until I maybe get some kind of year-end bonus with my paycheck...maybe.)

Anyway, I'm glad the economy hasn't gone into the shitter...I hope cooler heads will prevail to mitigate what I expect would be a complete disaster if we get into a full-on trade war with the whole rest of the world.

[Squinch]

40. Third quarter numbers will come out just before the election and

will show a big drop. This isn't a big deal.

[lancelyons]

47. GDP is nice to talk about but the key things on economy are...

DO you have a JOB.

Are you making more money.


Can you buy more stuff.


The GDP is not changing that.

[DemocratSinceBirth]

48. Much ado about nothing

https://www.democraticunderground.com/?com=view_post&forum=1002&pid=10931111

https://www.democraticunderground.com/?com=view_post&forum=1014&pid=2120311

https://www.democraticunderground.com/?com=view_post&forum=1014&pid=2120296

[elmac]

49. This is "yuge", "yuge"!!!

[SunSeeker]

66. It was higher under Obama, WITHOUT inflation puffing it up.

https://tradingeconomics.com/united-states/gdp-growth

[RussBLib]

71. Markets are unimpressed

Me too. It feels artificial.

[videohead5]

72. It is artificial

Companies exported a bunch goods before the tariffs took effect. that made growth go up like we were exporting more goods but the next quarter will be real bad because exports will be way down.

[moondust]

74. Would Wilbur Ross' Commerce Dept. lie?

In the past Drumpf himself has claimed the government's unemployment numbers were fudged for political reasons. He therefore approves of anyone claiming his corrupt administration's GDP numbers are fudged for political reasons.

[JCMach1]

75. That's all we got for the huge tax cut???

This is a Dead Cat bounce...