WP: Economy Grows at Slowest Pace in Two Years (stagflation)

[Pirate Smile]

Economy Grows at Slowest Pace in Two Years

By Fred Barbash
Washington Post Staff Writer
Thursday, April 28, 2005; 9:41 AM

The U.S. economy grew at its slowest pace in two years in the first three months of 2005, the Commerce Department reported today, thanks to slowing consumer and business spending, rising energy prices and the expanding trade gap.

The rate of growth of the nation's gross domestic product (GDP) -- the broadest measure of economic activity -- slowed to 3.1 percent, today's report said, down from 3.8 percent in the previous quarter and significantly below the 4.5 percent growth rate in the first quarter of last year.

Today's figure of 3.1 percent also failed to meet the expectations of economists for a growth rate of 3.6 percent.

-snip-
"Stagflation is rearing its ugly head," said Peter Morici of the Robert H. Smith School of Business at the University of Maryland, referring to a term coined in the 1970s for simultaneous economic stagnation and inflation.
http://www.washingtonpost.com/wp-dyn/content/article/2005/04/28/AR2005042800365.html

[rodeodance]

1. I did not need a news article to tell me this. I see cutbacks and people

and relatives all around me caught in the slow, crawling along economy.

[calimary]

6. So how'd those nice big magic-cure-all tax cuts work out for everybody?

I'm so sorry to hear this. People are really hurting. But thank GAWD them queers can't get married...

[Zynx]

2. Toss years of lousy wage growth in there as well

Hello 1970's.

[Mister K]

3. ...and record earnings of big business

Just check out the 1Q reports for Exxon Mobil, Comcast and Dow Chemical.

1Q 2005 earnings for Comcast is 4X that of 1Q 2004.
1Q 2005 earnings for Dow Chemical is 3X that of 1Q 2004.
Exxon Mobil earnings are up 44%

[Zynx]

4. That really doesn't have much to do with the larger economic issues

Strong earnings growth is actually usually a good thing for the economy.

[smirkymonkey]

16. Not if it's due to layoffs, plant closings and fuzzy math.

Ultimately, these practices are going to reflect in the numbers somewhere down the line.

[nolabels]

10. and besides they ain't growin shit

Their just stealin from us little folks and robbin the Treasury. When the last time you filled your gas tank?

(and just think, this is before the chimp ever took office)

The Emperor Has No Growth:
Declining Economic Growth Rates
in the Era of Globalization

By Mark Weisbrot, Robert Naiman, and Joyce Kim<1>
November 27, 2000

Executive Summary

Globalization and the policies of its most powerful advocates, the International Monetary Fund and the World Bank, have come under increasing criticism in recent years. In the United States, the median real wage is about the same today as it was 27 years ago. This means that the majority of the labor force has failed to share in the gains from economic growth over the last 27 years. That is drastically different from the previous 27 years, during which the typical wage increased by about 80% in real terms.


Trade has doubled as a percentage of our economy since the early 1970s, and there is no doubt that globalization has played a significant role in the worsening distribution of income here.


However, throughout the growing debate, it has generally been assumed that globalization has helped spur economic growth throughout most of the world. Even critics of globalization, and of the IMF and World Bank, have generally accepted this assumption. They have argued that these institutions have focused too much on promoting growth and not enough on other goals such as alleviating poverty and protecting the environment.


The official data for the last two decades (1980-2000) tell a different story. Economic growth has slowed dramatically, especially in the less developed countries, as compared with the previous two decades (1960-1980). For example:

From 1960-1980, output per person grew by an average, among countries, of 83%. For 1980-2000, the average growth of output per person was 33%.

Mexico would have nearly twice as much income per person today if not for the growth slowdown of the last two decades; Brazil would have much more than twice its current per capita income.

Eighty-nine countries – 77%, or more than three-fourths – saw their per capita rate of growth fall by at least five percentage points from the period (1960-1980) to the period (1980-2000). Only 14 countries – 13% – saw their per capita rate of growth rise by that much from (1960-1980) to (1980-2000).

In Latin America, GDP per capita grew by 75% from 1960-1980, whereas from 1980-1998 it has risen only 6%. For sub-Saharan Africa, GDP per capita grew by 36% in the first period, while it has since fallen by 15%.
(snip)
http://www.cepr.net/IMF/The_Emperor_Has_No_Growth.htm

[dbt]

5. Wow. STAGFLATION!

A word not heard in the land since 1976. Can "sideways waffle" be far behind?

:evilgrin:

[calimary]

7. Wouldn't surprise me. We already have "situational ethics" in full flower

again from another Democratic era of the past.

[ozymandius]

8. This Bush economic miracle is going gangbusters!

It really is a wonder to see how these Republicans have really turned this economy around.

AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90

[Pirate Smile]

12. Today, as of 11:10 am - Dow - 10,152.91 / Nasdaq - 1920.79 / S&P - 1152.28

[demnan]

9. Yeah and now I have to look for a job!

:cry:

[xchrom]

11. boy howdy, those tax cuts sure are doin the trick!

i have empathy for those who voted for gore and kerry -- and zip for those who didn't.

[n2doc]

13. yep, and we remember how the 70's stagflation era ended

Hope all of those folks still frantically buying overpriced houses as "investments" are ready hold on to them for a looooooong time, 'cause interest rates are going to the moon...

[carnie_sf]

14. At least in the 70's

we had good music, quaaludes, and the sexual revolution.

[idlisambar]

15. Well, 3.1% is not so bad

Of course 3.1% today < 2.0% 20 years ago when the old measurement standards were used.

[lovuian]

17. The worst of both worlds!!!

No doubt about it Labor unrest will start to happen!!! Its coming whether anybody wants it or not!!!

[Moderator]

18. kick

[paineinthearse]

19. Economic Growth Hits Two-Year Low

http://business.newsfactor.com/story.xhtml?story_id=13200BY4S0DO

Economic Growth Hits Two-Year Low

April 30, 2005 7:49PM

The latest reading on gross domestic product, released by the Commerce Department on Thursday, showed that consumers and businesses turned cautious in their spending in the January-to-March quarter, a key factor in the slower economic growth. Buffeted by rising energy prices and weakened consumer and business spending, the economy grew at an annual rate of just 3.1 percent in the first quarter.
The slowest pace of expansion since in two years was evidence of a new "soft patch."

The latest reading on gross domestic product, released by the Commerce Department on Thursday, showed that consumers and businesses turned cautious in their spending in the January-to-March quarter, a key factor in the slower economic growth. High energy prices and rising borrowing costs are causing Americans to tighten their belts a bit. The first-quarter's GDP figure, down from a 3.8 percent pace logged in the final quarter of 2004, represents the economy's most sluggish showing since the first quarter of 2003, when economic activity expanded at an even more mediocre 1.9 percent rate.

GDP, the broadest barometer of the economy's health, measures the value of all goods and services produced within the United States. The number of new people signing up for unemployment benefits rose last week as businesses coped with rising costs. New claims rose by 21,000 to 320,000, the Labor Department said. The newest snapshot of the economy disappointed economists. Before the report's release, they were forecasting a 3.5 percent growth rate for the first quarter. That estimate marked a downgrade from just a few weeks ago when economists were predicting that business growth would clock in at a pace of 4 percent or better in the first quarter. But they scrambled to lower those forecasts in the wake of a spate of disappointing economic reports in recent weeks.

Those disappointing reports -- including retail sales, industrial production and big-ticket orders to factories -- along with Thursday's GDP figure, add to evidence that the economy hit a "soft patch." That's the term Federal Reserve Chairman Alan Greenspan used last spring when economic growth slowed abruptly. Economists also are lowering their estimates for growth in the current April-to-June quarter -- to around a 3 percent rate -- or possibly less. For now, economists believe any soft patch will be temporary and don't believe that it would be a harbinger of recession. Although a 3.1 percent growth rate is disheartening to economists, it is a decent pace of expansion, nevertheless.

more.....

[bilgewaterbill]

20. I can hear it now...

"This is a remnant of the Clinton Recession"

[WindRavenX]

21. yay!

I'm going to be trying to find a job in this POS economy in two years with two college degrees- yippee! :sarcasm:

[SleeplessinSoCal]

22. Holy Cow! Did you used to be on the Yankee Boards?

I was back in 99-2001 - The Paul O'Neill years.... ;)

[WindRavenX]

23. why, yes, I did

yankees.com and nyyfans/bronx-bombers.com.

[SleeplessinSoCal]

24. SoCalNYY21SoFine here!

God, those were good days. I miss them like mad. Especially Paulie.

I remember you in political debates. Nice to see you again!

[WindRavenX]

25. funny "running into" you here

:hi:

[SleeplessinSoCal]

26. Sorry about the Economy

Working on two degrees and nowhere to go....

Very frustrating times. Good luck in the "job" market.

I hate Bush more than ever. His goal is nearly complete: Destroy the U.S. and all who live in her.

Hate him, just hate him!!

[Jamison]

27. Recession

I don't know why they (freepers mostly) deny we are back in a recession.

[paineinthearse]

28. The answer may be in the vulgar definition of recession.

It's a recession if your neighbor is unemployed.

It's a depression if you are unemloyed.

I think the type of jobs lost to globalization (high tech) disproportionately affected more "liberals"; the less skilled jobs and small business jobs which are where * supporters dewll, were less affected.

[Inland]

29. As a side note: SS is saved if we maintain even this shitty rate of growth

The SS doomsday scenario requires a recession followed by growth at a rate of 1.6%. This shitty growth rate now is 3.1%. gives you some perspective: the least worrisome thing in the US's future is meeting SS obligations.