Stronger Than Expected Economic Activity In Q2

 

The strongest economy in the world continues to perform:

Economic activity in the U.S. was considerably stronger than expected during the second quarter, according to an initial estimate Thursday from the Commerce Department.

Real gross domestic product, a measure of all the goods and services produced during the April-through-June period, increased at a 2.8% annualized pace adjusted for seasonality and inflation. Economists surveyed by Dow Jones had been looking for growth of 2.1% following a 1.4% increase in the first quarter.

Consumer spending helped propel the growth number higher, as did contributions from private inventory investment and nonresidential fixed investment.  [snip]

There was some good news on the inflation front: the personal consumption expenditures price index, a key measure for the Federal Reserve, increased 2.6% for the quarter, down from the 3.4% move in Q1. Excluding food and energy, core PCE prices, which the Fed focuses on even more as a longer-term inflation indicator, was up 2.9%, down from 3.7% in the prior period.

The so-called chain-weighted price index, which takes into account changes in consumer behavior, increased 2.3% for the quarter, below the 2.6% estimate...

Reality continues to not jibe with those darn "vibes"!

The Good, The Bad, And The Ugly

 

The good:

The European economy, hobbled by unfamiliar weakness in Germany, is barely growing. China is struggling to recapture its sizzle. And Japan continues to disappoint.

But in the United States, it’s a different story. Here, despite lingering consumer angst over inflation, the surprisingly strong economy is outperforming all of its major trading partners.

Since 2020, the United States has powered through a once-in-a-century pandemic, the highest inflation in 40 years and fallout from two foreign wars. Now, after posting faster annual growth last year than in 2022, the U.S. economy is quashing fears of a new recession while offering lessons for future crisis-fighting.

“The U.S. has really come out of this into a place of strength and is moving forward like covid never happened,” said Claudia Sahm, a former Federal Reserve economist who now runs an eponymous consulting firm. “We earned this; it wasn’t just a fluke.”

On Friday, President Biden hailed fresh government data showing that annual inflation over the second half of 2023 fell back to the Federal Reserve’s 2 percent target. Coupled with Thursday’s news that the economy grew by 3.1 percent over the past 12 months, the Commerce Department report showed that the United States appears to have achieved an economic soft landing.

The post-pandemic recovery challenged long-standing economic beliefs, such as the idea of an inverse relationship between unemployment and inflation. (As one rose, the other was expected to fall.) Expressed in what economists call the Phillips curve, this nostrum proved nearly useless in explaining the economy’s recent behavior.

Washington’s success in reviving the economy also suggests a new approach to future downturns, one that relies more on the government’s power of the purse and less on the Federal Reserve’s control of the cost of credit... (our emphasis)

The "feels" vs. "real" dynamic is beginning to change, with fears of a recession subsiding and consumer confidence rebounding sharply.  We've had the best recovery from the Covid pandemic downturn of any other nation in the world.  It's not a story the Christofascist Republicans want you to hear, but it's going to be heard, and more importantly felt in yet another existential election year.

The bad:

Russia is increasingly confident that deepening economic and diplomatic ties with China and the Global South will allow it to challenge the international financial system dominated by the United States and undermine the West, according to Kremlin documents and interviews with Russian officials and business executives.

Russia has been buoyed by its success in holding off a Western-backed Ukrainian counteroffensive followed by political stalemates in Washington and Brussels over continued funding for Kyiv. In Moscow’s view, the U.S. backing of Israel’s invasion of Gaza has damaged Washington’s standing in many parts of the world. The confluence of events has led to a surge of optimism about Russia’s global position.

Officials in Moscow point to growing trade with China, military cooperation with Iran, diplomatic outreach in the Arab world and the expansion of the BRICS grouping of major emerging economies — Brazil, Russia, India, China and South Africa — to include Iran, Saudi Arabia, the United Arab Emirates, Egypt and Ethiopia.

The BRICS expansion demonstrated the group’s “growing authority and role in world affairs,” and its work will focus on “sovereign equality,” Russian President Vladimir Putin said in a Jan. 1 statement as Russia assumed the chairmanship of the group. The Kremlin has begun to refer to itself as part of the “Global Majority.”

Internal Russian Security Council documents obtained by a European intelligence service and reviewed by The Washington Post, show that the Kremlin convened meetings in 2022 and 2023 on ways to undermine the dollar’s role as the world’s reserve currency. The ultimate goal, one of the documents stated, was to dismantle the post-World War II global financial system and the power it gives Washington. [snip]

European security officials said that Moscow is very much Beijing’s junior partner and that it is unclear China has any real interest in aligning with the Kremlin’s grandiose visions. But Russia’s focus on using its global position to disrupt the West is intensifying, the officials said, including in the Middle East.

Russia is “not omnipotent, but they try to use all possibilities. They are very consistent and systematic,” said one senior European official who, like others, spoke on the condition of anonymity to discuss sensitive matters...

Putin's "grandiose visions" are of the same cloth as his imperialistic designs on Ukraine and other parts of the former Soviet Union and beyond.  Just as his "3-day war" on Ukraine was foiled, so will his other "grandiose visions" as long as the West stays united.  The smaller the man, the bigger the ambitions.

The ugly: 

One of the fondest bits of resistance fantasy has been the notion that the nation’s economic elites — the titans of Wall Street, the beautiful people of Davos, the economic masters of the universe— would, in our moment of peril, mount the barricades to defend democracy.

To which a reasonable person might have responded: Have you met these guys?

For about five minutes after January 6, it seemed that the business community had, in fact, found or fabricated a moral compass. “There are some members who, by their actions, will have forfeited the support of the US Chamber of Commerce. Period. Full stop,” the chamber’s vice-president, Neil Bradley, declared when the group announced a ban on contributions to representatives who had voted against certifying Joe Biden’s win.

There were full-page ads and ringing declarations. “This is not who we are as a people or a country,” insisted Jamie Dimon, the chief executive of JPMorgan.

Ah, but.

The chamber quietly dropped its ban on election deniers. The cash still flows. And last week in Davos, we found out how far Dimon had evolved on extraneous details like the peaceful transfer of power and attempted insurrections. Dimon now says that Donald Trump was right about lots of things and, like other moguls, is now okay with either Biden or Trump.

“My company,” he said, “will survive and thrive in both.” ...

There needs to be a reckoning some day for these amoral leeches.  A second Biden term might be the only opportunity for that to occur.  And, no, we don't mean "revenge;" we mean strengthening regulations on the banking, private fund and securities world (if the Republican Supreme Court doesn't overturn or weaken Chevron v. Natural Resources Defense Council this term).  Allowing these amoral anti-democracy "titans" so much power is a recipe for more disasters.

Unemployment Drops To 4.6 Percent -- Thanks Trump!

The Department of Labor reports today that the economy added 178,000 jobs in November and that the unemployment rate dropped from 4.9 to 4.6 percent. (Must be thanks to that sweet sweet Carrier deal!) For the longer view, here's what has happened under the careful, unbiased gaze of the media since the year after President Obama took office:

Economy created 15.6M private-sector jobs since Feb. 2010. (This fact probably got less media coverage than Trump's 800 jobs at Carrier) pic.twitter.com/hYQdK4fgmd

— igorvolsky (@igorvolsky) December 2, 2016

At the end of President Obama's term, we'll be compiling a snapshot of social and economic indicators as a baseline to judge how much neo- fascist incompetent shitgibbon Donald "Rump" Trump MAGA during his reign of error, because your mainstream corporate media certainly won't be keeping track.

Big Job Gains Continue In July

Thanks a lot, Obama:

(click on image to enlarge)



(Chart:  Calculated Risk)

Economic progress continues:

The Bureau of Labor Statistics reported Friday that its Current Employment Survey of 146,000 business establishments and government agencies shows the economy created 255,000 new nonfarm payroll jobs in July, far above economists’ expectations. The BLS also revised June’s growth in new jobs from 287,000 to 292,000 and May’s from 11,000 to 24,000. All these are seasonally adjusted numbers.  [snip] 

July marks the 70th consecutive month of overall job growth, and the 76th month of private-sector job growth. 

That 70 consecutive months of job growth?  That's a record.

This economic success story needs to be hammered, and hammered hard.  (It's almost incomprehensible that a majority of voters seems to think neo- fascist bankruptcy expert Donald "Rump" Trump would do a better job on the economy than Hillary Clinton).  Fortunately, it seems the Clinton-Kaine campaign is doing just that.

Aggrieved Republican Economics: It's The "Lazy Welfare Moochers" Problem!

Michael Grunwald has taken the time to speak with some of the Stormtrumpers at the Republican National Convention Sh*tshow, specifically asking them about last night's purported theme, "Make America Work Again," in light of the economic progress being made around the country for most of the last seven years.  (First of all, would you have guessed that was their "theme" last night with all the foaming at the mouth Hillary hate?  Us neither.) Their responses should surprise no one, nor that there was a common theme in their answers:

In fact, the most common economic critiques I heard from delegates — more common than taxes, trade, unemployment, the national debt, or immigration — were variants of Mitt Romney’s “free stuff” critique of Obama, the notion that Obama is expanding the welfare state for lazy moochers. They said Obamacare is increasing premiums for the middle class, although premiums actually are growing more slowly than they were before Obamacare, in order to extend insurance to the poor. McNulty, the Republican activist in Iowa, compared the Obama approach to feeding homeless people under the bridge, so they remain comfortable under the bridge.

There's a condition known as "confirmation bias," which translates as "a type of selective thinking whereby one tends to notice and to look for what confirms one's beliefs, and to ignore, not look for, or undervalue the relevance of what contradicts one's beliefs."  It's a condition that is endemic in the "minds" of Republicans when it comes to any analysis of information that might suggest something positive about, say, Democrats or progressive policies.  Grunwald's interviewees provide clinical proof of this.  It's also proof that, when it comes to almost any topic, you can be assured that racially-charged code words like "welfare" and "lazy moochers" will work their way into the discussion.

Keep that thought and these numbers in mind, as you hear the bullshit being catapulted every night about the "disastrous" economy of President Barack Hussein =cough= black Muslim =cough= Obummer:

Unemployment rate under Republican George "Dumbya" Bush in January 2009:  7.8 percent
Unemployment rate under Democrat Barack Obama today:  4.9 percent

Jobs created during the record 76 straight months of job growth under Obama:  14.8 million

Dow Jones average in January 2009:  under 8,000
Dow Jones average today:  18,600 plus

If that's "disastrous," we wonder how one would characterize the last two days of the Republican National Convention Sh*tshow?

(h/t Wonkette and P.E.C.)

(Image:  A generic Republican.)

Strong Jobs Report

Some good news on a dark day:

... The Bureau of Labor Statistics reported this morning that the U.S. economy added 287,000 jobs in June, making it the strongest month for job creation so far this year and the best overall since October 2015. The unemployment rate ticked higher to 4.9%, but that's not necessarily bad news: more people entered the job market last month, which affects the broader rate. 

For the first time in over eight years, we've been at or below 5% unemployment for nine consecutive months. What's more, the dramatic rebound from May to June represents the largest one-month shift in employment since before the recession began. (our emphasis)

 Thanks a lot, Obama.

Jobless Claims Drop To Lowest Level In 43 Years

Thanks a lot, Obama:

Jobless claims unexpectedly decreased to the lowest level since 1973, indicating the U.S. labor market remains a pillar of support in the world’s largest economy.New applications for unemployment benefits fell by 6,000 to 247,000 in the week ended April 16, data from the Labor Department showed Thursday. The median forecast of economists surveyed by Bloomberg called for 265,000 claims. The number of Americans already on benefit rolls declined to a more than 15-year low.

“Claims are probably the single best indicator of the health of the economy,” said Mike Englund, chief economist at Action Economics LLC in Boulder, Colorado, whose forecast for 252,000 was among the lowest in the Bloomberg survey. “We assume the labor market will continue to outperform most measures.”

 If they were smart, Democrats would be out stumping on The Economy.  "If", we say.

Quote Of The Week - A Progressive Rejoinder On The Economy

In President Obama's final State of the Union address, a passage stood out as offering people struggling in the midst of a solid economic recovery a clear rejoinder to the scapegoating nativists and thieving plutocrats of the Republican/ New Confederate/ Stupid/ Shooter's Party:

I believe a thriving private sector is the lifeblood of our economy. I think there are outdated regulations that need to be changed. There is red tape that needs to be cut. (Applause.) There you go! Yes! (Applause.) But after years now of record corporate profits, working families won’t get more opportunity or bigger paychecks just by letting big banks or big oil or hedge funds make their own rules at everybody else’s expense. (Applause.) Middle-class families are not going to feel more secure because we allowed attacks on collective bargaining to go unanswered. Food Stamp recipients did not cause the financial crisis; recklessness on Wall Street did. (Applause.) Immigrants aren’t the principal reason wages haven’t gone up; those decisions are made in the boardrooms that all too often put quarterly earnings over long-term returns. It’s sure not the average family watching tonight that avoids paying taxes through offshore accounts.  (our emphasis)

Every message at every level Democrats craft to run on in 2016 must begin with the significant accomplishments of the Obama Administration.  But the message also needs to acknowledge the continuing struggles and, most importantly, who the real villains are (hint:  see above).   

December Jobs Report Shows Substantial Gains

The jobs report for December 2015 is out, and it shows many more jobs were added than experts expected:

In its regular report of the previous month’s job situation Friday, the U.S. Bureau of Labor Statistics estimated Friday that 292,000 seasonally adjusted new jobs were added to the economy in December, 275,000 in the private sector and 17,000 in government. The consensus of experts surveyed by Bloomberg ahead of the report said the estimate would be 200,000 new jobs had been created.  [snip]

The estimate makes December the 69th month in a row for private job growth, the 63rd in a row in which new public jobs have been added. The official unemployment rate—the so-called “headline” rate that the BLS labels U3—remained unchanged at 5.0 percent. The number of people officially unemployed remained unchanged at 7.9 million.

Conclusion?  It's all Obama's fault.

Unemployment Claims Close To A 42-Year Low

The Obama Administration continues to hit new lows (thanks a lot, Obama!):

The number of Americans filing for unemployment benefits fell more than expected last week, nearing a 42-year low as labor market conditions continued to tighten in a boost to the economy.

Initial claims for state unemployment benefits dropped 5,000 to a seasonally adjusted 267,000 for the week ended Dec. 19, not far from levels last seen in late 1973, the Labor Department said on Thursday.

Economists polled by Reuters had forecast claims dipping to 270,000 in the latest week. Claims have been below 300,000, a threshold associated with a buoyant labor market, for 42 consecutive weeks. That is the longest stretch since the early 1970s. (our emphasis)

Is the economy optimal?  Of course not.  Among other ills, income inequality and wage stagnation continue to afflict us and make us feel less prosperous than we feel we should be.  But this is one more piece of evidence that the U.S. economy is still solid.  One is only left to wonder, had we not had nihilist, reactionary Republicans at both the Federal and state levels working overtime to sabotage economic growth from the very beginning of the Obama presidency, how much better things would be right now.  

Economy Surged In Second Quarter

From MarketWatch:

The U.S. economy looks much more vigorous in the second quarter than previously thought, as a report released Thursday showed businesses got off the sidelines and spent some money.

The acceleration in business investment, if it’s sustained, could add to the economy’s momentum in the months ahead. The data show why the Federal Reserve is considering hiking interest rates at its next meeting in September.

The U.S. economy grew at a faster 3.7% annual pace in the second quarter, up from the initial estimate of growth at a 2.3% clip, the Commerce Department said Thursday.

When folks like the right-wing cranks at "The American Thinker Stinker" saw the late July estimate of 2.3%, they were predictably gleeful at the "lousy" growth.  Now we have a little tune for them.

Thanks a lot, Obama!

Jobless Claims Fall To Lowest Level In 40 Years

More disastrous economic news!  Thanks, Obama!

Jobless claims plunged by 26,000 to 255,000 in the week ended July 18, the fewest since November 1973, a report from the Labor Department showed on Thursday in Washington. [snip]

Claims continue to hover near historically low levels as employers are retaining workers to cater to a pickup in demand following a slump in early 2015. Combined with steady hiring across states, the improvement will help sustain household spending, the biggest part of the economy.

Oh, unemployment's at 5.3%.

The Economy Roars And The Turtle Brags

Good economic news, as December's employment gains were revised upward:

WASHINGTON (AP) — The United States capped its best year for hiring in 15 years with a healthy gain in December, and the unemployment rate reached a six-year low. The numbers support expectations that the United States will strengthen further this year even as overseas economies stumble.

The Labor Department said Friday that employers added 252,000 jobs last month and 50,000 more in October and November combined than it had previously estimated. The unemployment rate dropped to 5.6 percent from 5.8 percent in November. The rate is at its lowest point since 2008.

Of course, all this good news has caused Republicans to strain ludicrously to take credit, after having done everything in their power to slow down and sabotage Democratic efforts to turn the economy around.   Taxphobe and Ayn Rand professor at the Calvin Coolidge School of Economics Grover "It's Over" Norquist recently suggested ways Republicans could try to take credit for the booming economy.  You can't blame them for trying, but it's really more than laughable;  it's borderline obscene.  This party of plutocrat-slobbering, austerity-promoting, budget-starving, makers vs. takers, anti-Keynesian troglodytes should garner flying bricks to the head for suggesting they had any role in the recovery, except to make it slower, weaker and more beneficial to their wealthy patrons.

Well, here's Jon Stewart's takedown of turtle/ man hybrid Senate Majority Leader (thank you again, lazy Democrats) Mitch "Missy" McConnell's recent attempt to peg the Republican takeover of Congress to the good economic news (in the clip, it seems even McConnell is suppressing a smile as he jumps the shark with his claim).  The piece starts at about 1:30 and is followed by a jab at our continuing Afghanistan presence (with apologies for the ad):

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"Economic Facts Get In The Way"

(click on image to enlarge)

(Tom Toles, via gocomics.com)

Eugene Robinson writes:

Uh-oh. Now that the economy is doing well, what are Republicans — especially those running for president — going to complain about? And what are Democrats willing to celebrate? 

Last week’s announcement that the economy grew at a rate of 5 percent in the third quarter of this year — following 4.6 percent second-quarter growth — was the clearest and least debatable indication to date that sustained recovery is no longer a promise, it’s a fact.  [snip] 

For years, a central tenet of the Republican argument has been that on economic issues, Obama is either incompetent or a socialist. It should have been clear from the beginning that he is neither, given that he rescued an economy on the brink of tipping into depression — and in a way that was friendly to Wall Street’s interests. But the GOP rarely lets the facts get in the way of a good story, so attacks on Obama’s economic stewardship have persisted.

And as long as the "mainstream media" and timid, fearful Democrats let the Republicans get away with it, the low-information majority of Americans will continue to let these vandals wreck what's left of American democracy and prosperity.

Monday Reading

Some good reads to start off the week:

Paul Krugman on "The Obama Recovery."

Joan Walsh on the NYPD and a New Yorker's history of white backlash.

Joan McCarter looks back on "The Year in Obamacare."

Steve Benen on John Ellis ("J.E.B.") Bush cutting his Obamacare ties.

Happy reading!

"Worst Op-Ed In History"

Reflecting on the Dow Jones going over 18,000 yesterday, Matt O'Brien offers us "the worst op-ed in history:"

And that brings us to the worst op-ed in history. On March 6, 2009, former George W. Bush adviser Michael Boskin offered whatever the opposite of a prophecy is when he said that "Obama's Radicalism Is Killing the Dow." Now let's set the scene. Obama had been in office for less than two months at that point, and in that time, stocks had admittedly fallen a lot as markets worried that the big bank bailout known as TARP wouldn't actually be enough to save the banks. It got so bad that Citigroup briefly became a penny stock.

Boskin, though, didn't think that this once-in-three-generations financial crisis was to blame for the market meltdown. Instead, he blamed it on Obama for ... talking about raising taxes? "It's hard not to see the continued sell-off on Wall Street and the growing fear on Main Street," Boskin philosophized, "as a product, at least in part, of the realization that our new president's policies are designed to radically re-engineer the market-based U.S. economy." What followed was the usual conservative jeremiad against higher taxes on the rich, lower taxes on the poor, and deficit spending. Obama's trying to turn us into Europe, and that's why markets are pricing in the possibility of a Great Depression—not the dying economy he inherited. 

To illustrate how completely boneheaded this reactionary's "free market conservative's" prediction was, here's O'Brien's visual (click on image to enlarge):

With the usual caveat that Wall Street's gains don't reflect Main Street's pains and wage growth continues to disappoint, the news that the Gross Domestic Product grew by an impressive 5 percent in the third quarter and Obamacare is (barring malicious judicial activism from the Supreme Court) alive and very well, are positive signs.  So, no doubt Boskin and fellow reactionaries "free market conservatives" are still demanding to know, "When are you going to stop killing the economy, Obama?"

Economy's "Biggest Expansion In More Than A Decade"

It's all Obama's fault:

The U.S. economy roared into overdrive in the third quarter as consumer and business spending fueled the biggest expansion in more than a decade. 

Gross domestic product grew at a 5 percent annual rate from July through September, the biggest advance since the third quarter of 2003 and up from a previously estimated 3.9 percent, revised figures from the Commerce Department showed today in Washington.  (our emphasis)

As of 2 p.m. local time today, the Dow Jones Industrial Average is over 18,000.  There's also this:

American consumers are feeling pretty good. 

The University of Michgan's consumer sentiment index climbed to 93.6 in December from 88.8 in November. 

While this was down from the preliminary December estimate of 93.8, it was nevertheless stronger than the 93.5 forecast by economists. 

"Consumers held the most favorable long-term prospects for the national economy in the past decade," said Richard Curtin, the survey's director via Reuters. "Importantly, the 2014 gains in jobs and wages were widespread across all population subgroups and regions."

It remains to be seen how much the new Republican Congress will try to undo these gains through its deliberate policy of sabotage (tax cuts for the wealthy, budget cuts for the poor and middle class).  Or, perhaps, will the American public finally shake its short attention span to notice who's working to improve things?

Morning Reading - Krugman On The Economic Recovery

Paul Krugman talks about the recent strong job numbers and the economic success story that's emerging, but wants us to know it didn't have to take so long to get here:

 ... We could have had a much faster recovery if the U.S. government had ramped up public investment and put more money in the hands of families likely to spend it. But the Obama stimulus was much too small and short-lived — as many of us warned, in advance, it would be — and since 2010 what we have actually seen, thanks to scorched-earth Republican opposition on all fronts, are unprecedented cutbacks in government spending, especially investment, and in government employment.

Also, contrary to the media-amplified phony Republican talking points that President Obama's "anti-business" posture stymied economic growth, Krugman points out:

...[W]e can now say with confidence that the recovery’s weakness had nothing to do with Mr. Obama’s (falsely) alleged anti-business slant. What it reflected, instead, was the damage done by government paralysis — paralysis that has, alas, richly rewarded the very politicians who caused it.

That would be Republican politicians, of course, over to whom a deeply ignorant and malicious slice of voters have turned the legislative branch of government (see "What You Get..." below).

BONUS:   The Republican vandals continue to vandalize.

Cartoon And Comment Of The Day

(click to enlarge)

(Tom Toles, once great Washington Post Bezos Bugle)

E.J. Dionne, Jr., also looks at why Democrats aren't getting credit for the ever-more robust economic recovery, and points to the basic difference between the two parties and why Democrats ought to be drawing that distinction every day:

Democrats, going back to those happy Roosevelt days, have made their living as the party that lifts up the many and not just the privileged few. Republicans have traditionally said that growth is everything and if the rich get richer, their success will eventually work its way down to everyone else. 

Democrats can’t (and shouldn’t) echo conservative bromides. They are right to point to all that still needs to be done to end income stagnation in the middle class and among the poor. In his Northwestern speech, Obama advanced his proposals on education, job training, college loans, a minimum wage increase, infrastructure investment, equal pay and work-family balance. All would help matters, if only they could get by Republicans in Congress.

Having a Republican Senate with the Koch brothers and Wall Street pulling their strings will only make the "rest of this parade" (as Toles puts it) more difficult to clean up later.

President's Weekly Address - Expanding Opportunity (And Republican Obstruction)

Here's one of several money quotes:

I’ve taken actions to attract new jobs, lift workers’ wages, help students pay off their loans, and more. And the Republican plan right now is not to do some of this work with me—instead, it’s to sue me. That’s actually what they’re spending their time on. It’s a political stunt that’s going to waste months of America’s time. And by the way, they’re going to pay for it using your hard-earned tax dollars.

The basis for Weeper of the House John "Mr. Tangerine Man" Boehner's threatened law suit?  The President's failure to implement the Affordable Care Act ("Obamacare") quickly enough. Hawhawhaw.