1 Happy Days are here again!!

2

Yeah, for anyone who believes this shit I have a time share condo at Daytona Beach to sell.

 

3 If the White House trumpets this, they're idiots.  Inventory rebuilding could either be a temporary "restocking of the shelves" or a leading indicator for future growth.  Given the low rate of consumer spending, it's likely the former, since personal spending fell 0.8 from Q3 to Q4. 

I'm hopeful this is the leading edge of a recovery, but the underlying numbers aren't all that comforting.

4
I have no faith in this number whatsoever.  Expect it to be quietly revised downwards, possibly into negative territory.  There's no way there was actual 'growth' when the economy is contracting.

5 Total crap. Lower, but still very robust, levels of growth during the Bush terms coincided with strong job growth. Now, we have very strong growth and decreases in employment? I smell a rat, and it's name is government spending.

6 Heard Sean Hannity talking to an economist yesterday about this. I don't remember the details, but he predicted exactly this rate of growth, as well as a temporary drop in unemployment, due to the government's hiring of temporary employees for the Census. He predicted that for a short time, the government will be able to brag about the economy growing and the drop in unemployment, but that is will be short term and that probably by summer both the growth and the employment situation will be back to where they were.

7 voodoo math....using up inventory contributes nothing to GDP....only replacement of inventory counts. And restocking warehouses at Wal-Mart only helps China.

8 Could someone in the Washington Press Corps make the point, if the WH and Admin make a great deal of hay about this (which they will) - ask them if we still need 'Son of Stimulus'?

9
From the Washington  POST?!?!  You gotta be fucking kidding, Drew.  Now I know this number is absolute bullshit.

10 Who is the O man going to blame when the number goes negative again?

11 I don't know, Drew. Those caveats aren't stopping Skittles from raining down from the heavens where I'm at. Glory be, Obama really did save us! Hallelujah!!!

12 Real estate is still tanking and joblessness is continuing it's transition into a long term phenomenon.  Interest rates are inching up, if there is a double dip it is going to be a bad one.

With or without it any prospects for broad recovery are years in the future.

Won't stop the Obama cheerleaders from crowing about the end of the recession though, just provide evidence of their partisanship when reviewed  further down the road.

13 I smell a rat, and it's name is government spending.

Government spending is actually down this quarter as a percentage of total GDP.  This growth is being driven largely (3-4% of GDP) by a change in inventories which, if I remember my macro correctly, is usually the smallest component of GDP growth.

14 13, Ok, fine. But I still smell a rat.

15

Meh, this figure won't last. In a few weeks, it'll be reduced by about half. Just wait until the '10 1Q numbers are in for a more realistic assessment of GDP output.

Increasing pessimism in The Vapid One®'s policies will drive down any gains that might've been made. It's clear from his SotU speech that he won't change anthing he's doing to destroy our free market system. The best thing that can happen is a routing of Congress in November, forcing him to move to the center politically.

The guy just can't take a hint.

16 Unexpectedly unprecedented.

17 Economic growth? Never heard of it.

18

Economic growth is actually a BAD thing. It leads to inflation. Which is bad, bad bad. And it's all Bush's fault.

Oh wait, you say Bush isn't president anymore? Obama is? Well in that case, economic growth is good! We should all thank Obama for all the wise decisions he made that has given us all this wonderful, wonderful economic growth!

19 This is not good news. This is neutral news.
GDP growth is meaningless to most people. People are concerned about:
      jobs
      inflation (present and impending future inflation)
      taxes bite (present and future)
      earnings (GDP/person)
      retirement assets - 401K performance and value of their home

If we keep borrowing money and giving it to public sector employees, we can raise GDP. but the bill is worse than the benefit.
     

20 So, in what abandoned malls will they sell this inventory to folks who have no money?

21 So if I get this right, Q3 growth was mostly cash for clunkers, .gov and cash for trashed houses and this quarter is wal-mart and such dropping inventory less then before. Wow that sure makes me confident in the future.

22
First, this is good news. Tempting though it may be to down play it, it was annoying when the left did it for 8 years and I'd hate to be in the position of rooting against the country's well being.

I succumbed to temptation.

23 First, this is good news. Tempting though it may be to down play it, it was annoying when the left did it for 8 years and I'd hate to be in the position of rooting against the country's well being.

One of the great ironies of this economic catastrophe is that the left got one thing right during the economic 'boom' of 2002-07: to a large extent, it was a castle built on sand.  The majority of workers did not see any lasting benefit, as their incomes were steadily eroded by a variety of factors. 

This is no different.  Calling this phony, government-manufactured 'growth' an improvement is roughly akin to saying a man with a broken leg has been cured by the shot of morphine that dulled his pain.  Underneath, the economy still sucks, and pointing that out is hardly "rooting against the country's well being."  On the contrary, the ones rooting against the country's well-being are the ones who tout this number as proof that the economy is getting better, because they are getting in the way of doing what's needed to CURE the problems, rather than merely suppress them.

24 GDP growth?  I blame that mess on George Bush.

Cordially...

25 So, in what abandoned malls will they sell this inventory to folks who have no money?

Exactly.  If consumer spending doesn't increase, the economy will falter, or we'll have only tepid growth.  And Obama's idiotic policies such as threatening banks is creating just the sort of uncertain climate that keeps people holding on to their cash.

26

Will re-stocking inventories fill all those vacant store fronts and see-through office buildings? Does it mean both of my degreed, un-employed children will now be showered with job offers?

I think not!  This number wil be revised significantly downward after its milked by the WH!  All for "show", while the new rounds of ARM adjustment foreclosures and commercial foreclosures aren't even upon us yet!

27 So, then they start raising interest rates. Right? Oh, they can't, because the economy is too weak and we don't want to "endanger the "recovery"". But we're supposed to believe 5.7% growth (when the Q3 number was eventually revised down about 40% over the following 2-months)? Pravda had nothing on the BEA and Commerce Department under Obama. When I see interest rates start to rise from ZERO then I'll start to believe this "recovery" is real, and not an instant before.

28 Maybe somebody can put me some knowledge on this. GDP is the sum of consumption, investment, government spending, and (exports minus imports.)

The fact that government spending is added instead of subtracted in the operation seems to be the central factor that supports Keynsian economics. If the government spends enough fast enough, the GDP should be driven up. But why is government spending added instead of subtracted?

Government spending can only come from taxes that would decrease the contribution from spending and investment, or from borrowing against future taxes on the same. Can anybody answer this for me?

29 So, in what abandoned malls will they sell this inventory to folks who have no money?

Exactly.  If consumer spending doesn't increase, the economy will falter, or we'll have only tepid growth.  And Obama's idiotic policies such as threatening banks is creating just the sort of uncertain climate that keeps people holding on to their cash.

Posted by: Slublog at January 29, 2010 10:00 AM

I'm with you guys, it's hard not to be negative with all the threatening to business, banks ,wallstreet .heckling the rich, well class warfare in general, it reminds me of disaster in other countries that did so.

30 Bah.  Shouldn't have trusted the baseline numbers in the BEA's press release.  The overall government consumption numbers are a bit misleading.

Those giving 'credit' to government spending are on to something.  Federal non-defense expenditures increased 8.1% between Q3 and Q4.  However, that growth in non-defense spending was offset by a 3.5% drop in defense expenditures and a 0.3% drop in state and local spending.  Yikes. The non-defense spending since Q2 is pretty astounding.

31 29 Maybe somebody can put me some knowledge on this. GDP is the sum of consumption, investment, government spending, and (exports minus imports.)

The fact that government spending is added instead of subtracted in the operation seems to be the central factor that supports Keynsian economics. If the government spends enough fast enough, the GDP should be driven up. But why is government spending added instead of subtracted?

Government spending can only come from taxes that would decrease the contribution from spending and investment, or from borrowing against future taxes on the same. Can anybody answer this for me?

Posted by: Steve H in AZ at January 29, 2010 10:05 AM (2mqge)

Government spending is assumed to be removed from consumption and investment. It doesn't really matter what you call it, G, I or C, it ends up being the same number in the end. Now whether you believe that government spending has the same EFFECT as private spending or investment is another thing entirely.

32 Drew, wasn't Obama just saying the economy was Bush's fault?  In that case, thank Bush.

33 There won't be growth of employment until businesspeople get a complete picture of just how badly Obama and his consorts are going to rape them in the ass, whether any lubrication will be issued first, and whether they will at least get a nice reach-around out of the deal.  Don't see that happening for a while, given the Dims' current doubling-down on stupid.

34

 Maybe somebody can put me some knowledge on this.

I'll try. First, find some mirrors. Then round up a few smoke machines. Position them is such a way as to make the numbers look good for you, while out in the real world, more and more people are being funemployed, tax revenue falls, bankruptcies increase to record levels, and the economy is fundamentally altered into something reminiscent of a bad zombie movie.

Then drink heavily.

Voila! Instant recovery!

35 The CBO's not expecting unemployment to sink below 10% until 2011, and they project that it'll be 8% in the fourth quarter of 2012. If those numbers hold (a big if), Obama will be gone no matter what GDP growth is.

36 There won't be growth of employment until businesspeople get a complete picture of just how badly Obama and his consorts are going to rape them in the ass

NPR News this morning said Barry's going to propose a $5k tax credit for new hires.  No doubt with just enough prerequisites that only five or six businesses are going to hire anyone they weren't already planning on (...and they'll blow that $5k on the supporting accounting/paperwork).  I'm thinking "why fuck around with credits?  Why not just reduce the tax rate and let businesses sort out their own hiring?" but I know it's not about growth, it's about control.

37 Looks like "current personal taxes" (individual tax liability, basically) were down in Q4 after increasing slightly in Q3. So you tell me - if the tax burden is going down, are people earning more money? Or are they getting it in handouts from Uncle Sugar (which are, for the most part, untaxed) and then spending it? Personal Consumption (PCE), which drives a ton of GDP (the way it's calculated) is being driven almost entirely by transfer payments from Uncle Sugar - which ALSO add to the GDP. The number, like this economy, is crap.

38 My advice, stock up on food.
You are going to need it before this ride is over.

39

The fact that government spending is added instead of subtracted in the operation seems to be the central factor that supports Keynsian economics. If the government spends enough fast enough, the GDP should be driven up. But why is government spending added instead of subtracted?

Government spending can only come from taxes that would decrease the contribution from spending and investment, or from borrowing against future taxes on the same. Can anybody answer this for me?

I've wondered the same thing.  Government spending is like a loop: you're not creating money.  You're simply taking it from one place and putting it somewhere else.  Recycling it in a way that wouldn't happen if you didn't tamper with the process in the first place; and pissing off one of the parties (the taxed) to boot. 

Money and job/economic growth are created, simply put, when someone makes something out of nothing.  Yeah, they usually get borrowed money to jump-start their business, but the business fills a niche or creates a market and generates income and jobs that weren't there before. 

And borrowing money and then giving it out via the government only creates the allusion of creating something from nothing: you've kicked the can down the road when that government note is due, with interest of course.

I'm really suprised we in America have to hammer this home when dealing with liberals.  You'd think they'd have learned what happened to the government-controlled communist economies.  And what happened to China's once it started moving towards free markets.  Of course, liberals probably read a history book by Zinn, so that's probably why they have no effin' idea how a market works.

40 Jobless Recovery!!!

41
The Chinese aren't going to like Wee Wee doing the sex to them on their own dime.

42 First, find some mirrors.

Too much physical work.   Try social justice math.  How do the numbers make you feel?  If 9.8% feels better than 10.4%, 9.8% must be the correct answer! 

43

39 My advice, stock up on food.
You are going to need it before this ride is over.

And after it's over...only chaos.

Seriously, my thoughts were similar to everyone else's when I heard this number.  Expect the rate of increase to be quietly reduced in the coming weeks and the same kind of voodoo applied to the unemployment rate to make it look like it's coming down, albeit slowly.

44 There is significant political danger in this number for Obama, oddly enough.  His low approval numbers are in large part due to the fact that people no longer believe what he says.  He's suffering the effects of campaigning one way and governing another - a credibility gap.

If he starts bragging about these numbers in an environment of 10% unemployment, he runs the risk of increasing that gap.  People will look at their own economic situation and that of their friends, and many of them will wonder why the president seems so happy when people are still suffering. 

Robert Gibbs better keep the smirking under control today.

45

42
The Chinese aren't going to like Wee Wee doing the sex to them on their own dime.

I wonder what teh Zero will dole out as collaterial on the next loan? 

46
I know a retail buyer for May D.F., he says they didn't buy shit for Christmas, they were just trying to dump as much inventory as possible and bring in cash.

47

This is the result of the re-stocking of inventories, but nonetheless will be touted by the Donkeycrats and the media ( but I repeat myself) as proof that the stimulus and the rest of policies of the fucking idiot we have as president are working.

This isn't downplaying...it's fucking reality.

1. This will likely be revised down when actual figures..rather than the estimates that this is based on...come in.

2. Consumer spending is down, indicating that next quarter GDP growth will likely be negative .

3. The WH was touting that new unemployment claims are down...but "unexpectedly" not as much as predicted. Thing is...it's still a fucking net loss of jobs...and that's just based on the state rolls. It does not take into account those who have been kicked off beacuse they're benefits have expired. Estimates are as high as 22% real unemployment.

The only way to kickstart this piece of shit economy is to give people back their money to spend it on real goods and service...which will employ people...who will then be able to buy goods and service...which will employ more people...who will be able to then buy more goods and services..etc.

...which will actually increase the tax base and tax revenues

IT'S THAT FUCKING SIMPLE!!!!!!

(Despite what you're being told..we had record federal tax revenues in the months prior to the "collapse")

Instead...Obama and the rest of the idiot Donkeycrats...with a handful of RINOs have committed to spending trillions on empirically disproven Keynsian theory ...basically doing nothing better than flushing it down the toilet

 

 

 

48 Posted by: Zombie Charlie Gibson You're not dead yet, Charlie. You just smell that way.

49 Our bullshit factories are running at 100% capacity comrades! 
More are being constructed every day!

50

Now the lies start … Government economists pretending that the economy grew. Who didn’t know in an election year this was coming? Watch — Stimulus spending through the roof this year.

Government spending is not economic growth.

Consumer spending was down in December. Wages in the private sector was up 1.9% in 2009, inflation was up 2.5%, what growth?

So tell me what fundamental economic indicator has changed? The BLS said in October that they would have to revise the unemployed number upwards 1.2% because of errors in 2009. The update date is February 4 2010, said the BLS

51 Griff, I guess I understand the premise, it's just that the sum total of government spending (at least the portion of it used to calculate the GDP) detracts from domestic production, unlike consumption and investment. Isn't it true that the more G, the less C and I?

52
If he starts bragging about these numbers in an environment of 10% unemployment, he runs the risk of increasing that gap.

Initial unemployment claims jumped up over the past couple of weeks, so the January unemployment numbers are likely to be ugly.

53

When we have more jobs created than lost, we have a chance to crawl out of this hole. Jobs created have to be non government funded jobs too. Fixing roads and building trains with tax money is debt driven....not an answer. Debt is what got us here. Bush/Congress refused to balance budgets...remember Cheny's 'deficits don't matter' snark. He was wrong about that...debt matters.

What makes all this so very much worse is the balance of payments problem. America is STILL importing more goods than exporting. So even if we were to somehow have a net positive employment report the glide path with the ground import/export wise is still on.

We export debt and import goods. This is the real disaster in the making. This trade deficit is a strong brake on GDP.

Neither political party seems willing or able to correct it. Instead debt is used by pols as a foil to control the American people. Full employment is possible and is never realized as that kind of economy would diminish governments importance in our everyday lives. We have become Washington's foster kids.

54 if we are doing well, , brighter future ,why did they raise the debt ceiling another 1.9 trillion?

55

Exactly.  If consumer spending doesn't increase, the economy will falter, or we'll have only tepid growth. 

This was inventory replacement for Wal-Mart, Keep in mind that Wal-Mart was one of the few stores that increased sales as people switched from higher cost stores to lower.

But, it still doesn't explain 5.7%. That number is far too high and will be adjusted.

 

56 First revision will be down to 4.2% and the final will be very quietly revised down to 2.9% in late February.

This is all show and the administration will do anything, ANYTHING to make itself look good. A willing MSM will trumpet false good news and bury the truth.

57 Instead...Obama and the rest of the idiot Donkeycrats...with a handful of RINOs have committed to spending trillions on empirically disproven Keynsian theory ...basically doing nothing better than flushing it down the toilet

While at the same time forcing a whole lot of uncertainty by threatening to unleash cap and trade, health care 'reform' and a host of other bad policies.  A perfect storm.

58 Lies.

That's the problem.

No one wants the country to fail. If Obama's policies actually worked there wouldn't be nearly as much vitriol.

We've seen time & time again the unemployment numbers, retail sales, wholesale prices, etc. be revised up or down after the fact to better relate to reality.

This too will end up being based on a pack of lies.

59 it's not dogging the prosperity of the country if it's truth. Truth may hurt, but it will also free us and help us prepare.

from the Market Ticker:

If one was doing GDP as a "balance sheet" you'd have to subtract the addition in liabilities (debt) from the money spent, but of course GDP isn't computed that way.  This results in a nutty overstatement of GDP when it is used as a measurement of economic health, which of course is how all the so-called "economists" use it.

Indeed, that $500 billion is an annualized distortion of a whopping 3.57% of the entire economy!

-->http://tinyurl.com/y9pcadr

3.57%!!

60 I wonder what teh Zero will dole out as collaterial on the next loan?

Mineral right to those Uranus diamond mines.

61

But there remained reason to doubt how strong the economic recovery will be in 2010. The biggest component of the GDP growth was a steep drop in the pace at which businesses were cutting back on their inventories. Firms reduced their inventories by $33.5 billion in the fourth quarter, compared with $139 billion in the third. In the math of GDP, which attempts to capture the value of goods and services produced within U.S. borders, that added 3.4 percentage points to overall growth.

So in the GDP calculations a $33.5 billion dollar REDUCTION in inventory is scored as an INCREASE in GDP. What kind of stupid ass accounting is this? Is this because it was less of a reduction from the last quarter? If I were to ask what was the total yearly change in inventory you would add each quarter together. If you plot it on a chart the inventory number would still be going down because the number is negative. The baseline is 0 not last quarter's number.

If anything this 3.4% number should be subtracted from the GDP figure: 2.3%-3.4% = -0.9%

 

62 But, it still doesn't explain 5.7%.

I'm betting a bug chunk of that will be increased energy expenditures due to all that Nov/Dec global warming that was taken at face value rather than normed downward to correct for it being a particularly harsh winter.

63 Geoff's point at #22 "temptation" link is a good one: Amazing how accurate Goldman Sachs is. Almost like they've got inside information or something.

I'm an English major, so math is hard, but Denninger does a pretty good job of breaking down the numbers here. He notes the interesting conundrum that somehow personal incomes went up, while personal taxes went up; i.e., gummint handouts.

Worth reading the whole thing, but here's a brief excerpt: As I have repeatedly pointed out we have over the last 18 months added about $500 billion (annually) in transfer payments to the federal budget.  This counts in the GDP report as PCE, but is not actual output any more than I am richer if I go to the bank and borrow $20,000 on my credit card.

If one was doing GDP as a "balance sheet" you'd have to subtract the addition in liabilities (debt) from the money spent, but of course GDP isn't computed that way.  This results in a nutty overstatement of GDP when it is used as a measurement of economic health, which of course is how all the so-called "economists" use it.

Indeed, that $500 billion is an annualized distortion of a whopping 3.57% of the entire economy!

64 No worries, Wall Street sez it's the best economy in the history of ever!

65

This may be real.  From where I am (Delaware and PA border), I did not observe any lack of shoppers, and those shoppers are shopping not just browsing.

But I'll give you my take -

(1)  Lots of shoppers in Best Buy and such speak in foreign languages since early summer.  Less so in the Nov/Dec month but still some.

(2)  We've had large discount everywhere.  Stores expecting shoppers tightening their belts and used deep discount to attract business.

(3)  Plenty of people like me took the discount advantage and stocked up on items, in anticipation of lean months ahead.  I won't be spending so heavily in near future.

IF WH uses these real (but temporary) numbers to make the claim that recession ("The Worst Depression Since The Great Depression") is over, they don't know reality.

66 Look at the GDP I created or saved! Everything's turning up Barack. Wanna see my unemployment numbers math again? We used the same calculator, so you can be sure of the results.

67 Hey, UGRev @62--ya beat me to the punch!

68 Ooops, point #1, foreign languages meaning we've had some Europeans taking advantage of the weaker dollars...

69

Don't knock debt-financed government projects just because they are financed by debt, especially in this environment. We're borrowing at close to zero % interest. The Congress has to think up some pretty poor ideas for projects before they won't lead to enough growth to service debt at 0 %.

Shit. We're screwed, aren't we.

70
What kind of stupid ass accounting is this?

It isn't accounting, it's "economics". 

71 Barry: I had Biden figure out the GDP number for the 4th quarter. The guy is a math genius!

72

These numbers, quite frankly, are bullshit--the same as they were during the housing bubble.

How on earth is the economy expanding when the U3/U6 is 10%/17.3%, sales and income tax revenues have fallen through the floor and the states can't pay their bills, businesses and consumers are still deleveraging, and year-over-year declines in shipments and new orders are down over 15% and 20%, respectively?

Karl Denninger pointed out where a big portion of this number is coming from this morning:

As I have repeatedly pointed out we have over the last 18 months added about $500 billion (annually) in transfer payments to the federal budget.  This counts in the GDP report as PCE, but is not actual output any more than I am richer if I go to the bank and borrow $20,000 on my credit card.

If one was doing GDP as a "balance sheet" you'd have to subtract the addition in liabilities (debt) from the money spent, but of course GDP isn't computed that way.  This results in a nutty overstatement of GDP when it is used as a measurement of economic health, which of course is how all the so-called "economists" use it.

And then there's this gem:

Current-dollar personal income increased $119.2 billion (4.0 percent) in the fourth quarter, compared with an increase of $35.1 billion (1.2 percent) in the third.

Personal current taxes decreased $11.7 billion in the fourth quarter, in contrast to an increase of $3.5 billion in the third.

Got it?  People aren't earning the money, the government is handing it out.

 During the housing bubble, GDP went through the roof, but it wasn't "real" GDP--it was based on unsustainable levels of debt.  When people are mortgaging themselves for vastly overpriced homes, and using the equity in that vastly overpriced home to buy cars, vacations, big screen tvs, etc., that GDP growth will inevitably come to a halt when income can no longer keep up with the debt obligations. 

The same thing is going to happen here--people are being told that their "house" (the United States) just had their "equity" go up another 5.7%, so go out and spend, spend, spend!  Even though the spending is from government sources, and thus unsustainable levels of debt.

I really, really can't wait until next year's housing mortgage resets--no amount of happytalk from these jerkwads is going to intrude on the reality of another credit bubble popping.

73 #1, foreign languages meaning we've had some Europeans taking advantage of the weaker dollars...

I saw a Range Rover with European plates driving in Jersey boonies last week.

74

5.7% GDP growth?

trumped up, meaningless number, I don't believe it for a minute.

75 <blockquote>First, this is good news. Tempting though it may be to down play it</blockquote>

I'd rather wait a month or so to see what the revised, true numbers are.

76 Why trust this number? They haven't given us a straight one yet.

77 "Inventory" means NOTHING until you SELL it.  And with 17.3+%  unemployed, there isn't going to be a whole hell of a lot of SELLING.

78 People will look at their own economic situation and that of their friends, and many of them will wonder why the president seems so happy when people are still suffering.

After a year of the media churning out photos of Obama's endless vacations, Obama's wagyu cocktail parties, Obama hanging out with rock stars and pro athletes, Obama's wife and children going clothes shopping in Paris and ordering custom thigh-high boots (that still cracks me up), etc, I hope "wonder" isn't their reaction.

79

"Yeah, for anyone who believes this shit I have a time share condo at Daytona Beach to sell."

+1000.  This is horse shit.

80 Denninger's assesment sounds quite reasonable to me -- i.e. this is largely phony.

The taxes down and incomes up situation is interesting.  If you've fallen off the backside of UE and go to income=0, then eventually find your way over to food stamps, I suppose suddenly your "income" is no longer zero.

Finding accurate and timely data on SNAP has become rather difficult over the past year...which suggests its being made difficult on purpose.

81 Does this number account for the fact that our USD buys less than it did a year ago? In other words, we have to grow the money supply just to stay even with our usual consumption habits?

82

"Yeah, for anyone who believes this shit I have a time share condo at Daytona Beach to sell."

I believe it as much as I believe Barry created or saved 2 millions jobs.

83 to polynikes @28:

Cost of housing.  Cost of transportation.  Cost of food.  Cost of insurance of all kinds -- medical, homeowner's or renter's, medical.  Annual raises of two or three percent, which were promptly eaten by inflation.  Tax increases, especially state and local. 

84 I saw the same thing.. I think there was a $300K a year cap for small business that this applied to.

That's nothing to most small businesses that I know of.   A self employed guy who has enough work to employ 2 employees would cap out quick if he was in construction..

My neighbor the dandelion killer - with one (seasonal) employee - would probably top that if he hired another guy.

85 And remember guys, these numbers don't even account for the billions of dollars in unicorns that the stimulus pumped into the economy.

86 GDP is always readjusted and last quarters' 3.8% the Dems bragged about has been readjusted downward by 1/3 already!

87 But...but...I thought Paul Krugman said we need a more, bigger, GINORMOUS stimulus package in addition to the $800 billion package we have already. I thought the liberals were saying that the economy sucked because Porkulus wasnt grand enough? Or maybe it was the phantom tax cuts that Obama praised he pushed through during the SOTU the other night?

88 Others have mentioned Denninger's Market-Ticker, and I read him frequently. He's kinda a Gloomy Gus, but has been very prescient. I don't pretend to understand half of what he says, but I read his stuff because he scares me so.

Denninger notes the PCE component of the GDP growth, and notes that "People aren't earning the money, the government is handing it out.  You don't pay taxes on government handouts, for the most part." And the .gov is seeing huge drops in tax revenue. http://tinyurl.com/ykzykyk

Posted by: Earl T at January 29, 2010 10:02 AM (eRRHI)
Will re-stocking inventories fill all those vacant store fronts and see-through office buildings? Does it mean both of my degreed, un-employed children will now be showered with job offers?...

Amen, brother. I've got a 25 year-old son with 2 degrees and no job (nor any job prospects) living under my roof. I've also got a daughter in her third year of school, but has been unable to get an internship for this upcoming summer. Moreover, I've got a brother-in-law (construction engineer) who has been out of work for 10 months. There are tons of qualified folks out there un- or under-employed. I bet there is nobody who does not know someone who is out of work.

89 @91, I think your Gloomy Gus is correct. The inventories of businesses is being rebuilt.

90

....these numbers don't even account for the billions of dollars in unicorns that the stimulus pumped into the economy.

Those damn things ate up my profits.

91

Did Barry just open his big mouth again? Because the market is heading south all of a sudden.

92

Two things occur to me: 

1) Why should I believe this number?  Economic numbers are constantly being revised, and for some reason the original numbers are unaccountably favorable to democrats.  I'll believe this number when it's been simmering for a while.

2) If the GDP is growing, how much of it is a result of government spending?  And how much of that government spending is composed of money hot off the presses?  Can the GDP be goosed artificially by an increase in the money supply?

3) If the GDP is growing due to firms restocking their inventories from the year end frenzy, doesn't that mean they're in a position now to lay off more of their production workers until consumer spending picks up?  How's that doing?

93 The economy is not structurally sound. Period.
There will be spurts here and there but so what ?
Name one sector of the economy that has legs for the long term. Just one.

And tempting though it might be to cast blame on Obama, that is unfair as well. The FOUNDATION of the system is cracked and the superstructure will remain wobbly.
It just will. The Financial Services Industry is KILLING its host.

94 Three things.  Three things occur to me.

95

I've got a 25 year-old son with 2 degrees and no job (nor any job prospects) living under my roof.

College graduates who cannot find work are not counted in the unemployed, for the most part, because in order to be eligible for unemployment..thus being actually counted as unemployed...he/she would have had to have had a full time job for a year already..

 

96 Posted by: beedubya at January 29, 2010 11:41 AM (AnTyA)

Once he starts looking for work, he should be counted in the numbers. Current students generally aren't, but graduates, even if they haven't worked yet, are added to the labor market.

97 Inventories had been allowed to collapse to the point where it was starting to cost more in business than it was saving by deferring restocking. 

Its only one data point, but the electrical dept at the local Home Depot (1 mile away) had/has become so thin that I had to go to a traditional electrical supply place 10 miles away to find some rather common items.  I totally cleaned out that HD's supply of 1 1/4" EMT conduit fittings doing the wiring for my tankless heater.  One guy, doing a relatively tiny job, cleaned out a HD of common fittings.  They also had no 500' rolls of black #6 wire in stock and I had to settle for red (which was OK).  Last time I was in there, they had zero metal Octagon box covers on hand and I was reduced to rummaging through the trunk of my car and random boxes of crap in my garage to scare one up since it was at night and the electrical supply place was closed.

98 I view this with very cautious optimism.  I mean, it's better than shrinking, right?  I totally agree with the comments about not being out of the woods by a long shot.

99 10 Who is the O man going to blame when the number goes negative again?

Posted by: RobD at January 29, 2010 09:52 AM (sV3Dv)

Do you really have to ask who he's going to blame?

100 Since this is the worst recession since the Depression, I am beginning to wonder if all those stories about the Great Depression were just a little exaggerated. This wasn't so bad at all!!!

101 Did Barry just open his big mouth again? Because the market is heading south all of a sudden.

Just the sheep who believe this shit getting sheared.  Suck'em in, wring'em dry.

102 I blame the policies of  the past administration.

103 OT but interesting nonetheless.

Via Drudge, a World Net Daily FOIA discovery:

Taxpayers pay $101,000 for Pelosi's in-flight 'food, booze'
Speaker's trips 'are more about partying than anything else'
(http://www.wnd.com/index.php? fa=PAGE.view&pageId=123472)

Thanks, Nancy, for yet more ammo to get you booted from office. Maybe you should have used Obama's stash instead of taxpayer money to fund your team's binges. In places I've worked, you pull that stunt and you're fired. I can't wait to test the perception of this wise use of taxpayer money come November.

104

Just the sheep who believe this shit getting sheared.  Suck'em in, wring'em dry.

Apparently one of the TBTFs--Morgan Stanley, I think--predicted the 5.7% announced rate almost exactly.  Looks like they may have set a bull trap, for today at least.

105

103 Since this is the worst recession since the Depression, I am beginning to wonder if all those stories about the Great Depression were just a little exaggerated. This wasn't so bad at all!!!

The thing about the Great Depression is it wasn't a single depression.  Sure, this depression wasn't all that bad for folks that kept their heads above the water, but what if it happens again each year for the next 8 years?  Still not a problem? 

But of course, we have something they didn't have back then...

106 That equipment investment number is almost certainly based on the fact that the critters in Washington are messing around with the tax code. There is still a good tax credit for small businesses to depreciate up to $250,000 in equipment in the tax year in which it's purchased. Firms definitely aren't buying capital equipment to add capacity.

107 Show me the  JOBS

I could care less about growth if there aren't any fucking JOBS

108 You morons have scared me for life.  I was going thru the lunch line today, and there at the end.  Yep a big tray of butterscotch pudding, and well .... now I banned from the cafeteria!

109 1. It is good news, even if Odumbass gets credit.
2. It will likely be downgraded.
3. Not super good news though, as the base line was so low. (5.7% growth on much smaller economic activity).
4. As the administration says, its George W. Bush's fault credit.
5. Any major shock to the world economy (Greece default, UK losing credit rating) and our economy goes into free fall.

110 Apparently one of the TBTFs--Morgan Stanley, I think--predicted the 5.7% announced rate almost exactly.  Looks like they may have set a bull trap, for today at least.

I'm firmly convinced the markets are being manipulated by strategic leaks and timing of this kind of shit. 

Look at what happened with US Steel a couple of weeks ago -- Deutche Bank puts out a "buy" recommendation at an already insane price in the high 50's and it goes soaring up to 65 or so only to collapse back to 45 today after (expected by me at least) poor earnings reported earlier in the week.  Now another analyst is putting a 1Y price target of $35 on it, and another is going with $55.

I really think the SEC should look into what kind of shenanigans might be going on here.  With the Deutche Bank thing, as they say, "I question the timing".  DB knew the next earnings report was coming, and it would have been more prudent to see what it said before leading all those sheep to the slaughter.

111 It's not so much that our profession was surprised by this data as much as it was that, while growth (and considerable growth) was expected, the magnitude seems a bit high (I was figuring somewhere in the 4-4.5% range myself). The main question is whether or not these figures portend future increases in employment (supply creating demand; although this may mean deflation is still a potential threat) or whether it is simply increases in worker productivity, which could mean a rapid recovery once firms feel stable enough to start hiring again. That being said, the political situation makes this all a crap shoot.

112 GDP is always readjusted and last quarters' 3.8% the Dems bragged about has been readjusted downward by 1/3 already!

Posted by: bullwhacker at January 29, 2010 11:07 AM (aMpG9)

What he said.

113 If the economy keeps up at this pace we'll have deficits of only $1 trillion for the next 9 years.  Woohoo!

114

Until Obama stops destroying weath and making war on capital I'm not investing my capital in America.

I know I'm not alone in that position.  Things aren't going to get better until the risk in investing is lowered and people can be confidant that their investments aren't going to be raided by taxes or government takeover of the corporations that were invested in.

Until that policy change happens, numbers are just numbers and don't mean nuttin'.

115

Typical DrewM equivicating, sad. 

I will admit I stopped reading at second paragraph.

116

Beck says it's a fraud and he predicted months ago that the numbers are slowly going to look better (actually, that the talking heads are going to tell you everything's improving), but things aren't changing.  Plus, bammy's still got 2/3 of the spendulous left that he's going to start doling out over the summer, just in time for Nov. elections.

Rush was reading a financial piece today, Art Laffer, I think, who said 2010 is going to look like an improvement, but we're headed for collapse in 2011.

117 That is the highest pace of growth since 2003, and...

An AP article on Yahoo says it's the "fastest" since 2003. Sounds a lot like they're trying to fool the typical ignorant consumer of MSM product into thinking that gangbuster times are potentially upon us again.

118

I really think the SEC should look into what kind of shenanigans might be going on here.

Agreed, but these are the same guys that couldn't figure out Bernie Madoff was running a ponzi scheme despite being told about it repeatedly.  Expecting comeptence from these clowns might be a bit unrealistic.

119

I really think the SEC should look into what kind of shenanigans might be going on here.

They are too busy looking in to how companies are affected by the phony AGW scam. The SEC is the most useless organization we have in DC. (other than congress)

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