US economic recovery is complete. pt 1 Archived

[OilFinder2]

As measured by GDP, the old thread(s) is/are now obsolete. We have now officially begun a new chapter in the US economic recovery/expansion.

Article

Recovery Ends. Expansion Begins.
By: MarketMinder Jan 29, 2011

The US Bureau of Economic Analysis (BEA) released its first estimate of Q4 2010 GDP on Friday. The report showed accelerating growth—to 3.2% annualized real GDP growth in Q4, missing analysts' expectations of 3.5%. While some met the report with disappointment, there are also many strong points.

Of note and little mentioned, US real GDP eclipsed its pre-recession peak for the first time (nominal GDP already accomplished that feat), meaning the economic recovery is now over and expansion has officially begun. And headline GDP isn't the only metric that's expanding—personal spending and exports are both above prior highs

The acceleration from Q3 2010's 2.6% growth was largely driven by two contributors: Consumer spending and net exports. Consumer spending posted its largest quarterly increase (+4.4%) in four years, and net exports, a metric reducing GDP in Q2 and Q3 2010, reversed course and added to headline growth.

[...]

[OilFinder2]

Now, lest there be any doubt about the shape of the recession/recovery, from the BEA website I made this chart showing real GDP from 2007-2010.



Recall the original article:

“People have been talking about an L-shaped recession,” adds Michael Mussa, senior fellow at the Peterson Institute for International Economics. “The record shows you come back sharply from deep recessions” like the current one.

These economists and others see a V-shaped pattern, similar to that of the recession-recovery periods of the 1970s and 1980s. And they say there is ample evidence to support it.

Notice from the chart there were 6 quarters from the prior apex of real GDP (in Q3 2007) to the nadir in Q2 2009. Since then it took another 6 quarters to reach a new apex. Hence, a V. Granted, it's a broad V-shape, and maybe it's a bit awkward, possibly more like a weird-shaped U. Regardless, the 6-quarters-down to 6-quarters-up makes it, from the perspective of time alone, a V.

I look forward to posting more good news in this thread.

[nobodypanic]

you got one for world GDP? under the hypothesis that as soon as world GDP begins to return to pre-crash levels, oil should ramp up and bang... everything goes back down again, seems it's almost time to put that model to the test.

[Unconventional Ideas]

Whew! I thought we'd never get out of that recession.

Now it's "over" everything returns to normal, right?

[eXpat]

[OilFinder2]

you got one for world GDP?

The latest number for world GDP only goes to 2009. I don't think anyone collects quarterly world GDP, and it's still too early in the year for last year's world GDP number to come out yet. But almost certainly it's recovered past its pre-recession high as well.

Now it's "over" everything returns to normal, right?

It's sure starting to look that way.

[Armageddon]

If they can only fix these issues :

1) 23% unemployment
2) 43 million on food stamps
3) 11% of homes empty
4) $100.00 per barrel oil
5) skyrocketing food prices
6) the collapse of new home building. 2.5 million units per month down to 300,000
7) Falling home values
surging foreclosures

Good luck with that

[Lore]

You forgot food and commodity inflation in general.

[Armageddon]

You forgot food and commodity inflation in general.

#5 ?

[Xenophobe]

If they can only fix these issues :

1) 23% unemployment
2) 43 million on food stamps
3) 11% of homes empty
4) $100.00 per barrel oil
5) skyrocketing food prices
6) the collapse of new home building. 2.5 million units per month down to 300,000
7) Falling home values
surging foreclosures

Good luck with that

Oh please.

#1 underemployment is not unemployment but lets pump those numbers! #2 people are always on foodstamps and in recessionary times of COURSE there are more than good economic times #3 buying opportunity for slum lords, more economic activity! #4 big deal, been there, done that, buy a Volt #5 its called inflation and its been around since before you were born #6 see #3 #7 see #3 #8 see #3.

Fortunately, none of this has anything to do with peak oil.

[Armageddon]

They all do

[OilFinder2]

LINK

Feb. 1, 2011, 1:11 a.m. EST
Ready for takeoff
Commentary: America moving from vicious cycle to virtuous circle
By Irwin Kellner, MarketWatch

NEW YORK (MarketWatch) — One of the most promising pieces of news to come down the pike in a long time is the report covering the fourth quarter’s gross domestic product.

On the surface, it looks good. Adjusted for inflation, the GDP’s growth rate in last year’s closing quarter was greater than the third’s, which, in turn, exceeded that of the prior quarter.

Drilling down beneath the surface, this report looks even better.

Consumer spending, which is the biggest chunk of the economy, provided the biggest contribution to last quarter’s growth. Its rate of increase, 4.4%, was nearly twice as fast as it was in the previous quarter — and the quickest clip in close to five years.

What makes this even more interesting is that it occurred while the unemployment rate was high and housing still depressed. As I pointed out in my column of Dec. 21, 2010, these were offset by pent-up demands combined with increased saving and lower debts.

This surge in consumer spending — which was capped by a 0.7% rise in December — also predated the extension of the Bush tax cuts and the accompanying cut in the payroll tax, suggesting that people’s outlays may well be growing even faster in the current quarter.

Besides the contribution by consumers, other components of the GDP advanced, too. As a result, final sales rose by a thumping 7.1% pace — the biggest quarterly increase for this measure since 1984.

Business was most likely unprepared for this surge in demand, since lots of goods were sold from stock. Inventory liquidation last quarter subtracted a massive 3.7 percentage points from the fourth quarter’s rate of growth.

[...]

[ColossalContrarian]

LINK

Feb. 1, 2011, 1:11 a.m. EST
Ready for takeoff
Commentary: America moving from vicious cycle to virtuous circle
By Irwin Kellner, MarketWatch

NEW YORK (MarketWatch) — One of the most promising pieces of news to come down the pike in a long time is the report covering the fourth quarter’s gross domestic product.

On the surface, it looks good. Adjusted for inflation, the GDP’s growth rate in last year’s closing quarter was greater than the third’s, which, in turn, exceeded that of the prior quarter.

Drilling down beneath the surface, this report looks even better.

Consumer spending, which is the biggest chunk of the economy, provided the biggest contribution to last quarter’s growth. Its rate of increase, 4.4%, was nearly twice as fast as it was in the previous quarter — and the quickest clip in close to five years.

What makes this even more interesting is that it occurred while the unemployment rate was high and housing still depressed. As I pointed out in my column of Dec. 21, 2010, these were offset by pent-up demands combined with increased saving and lower debts.

This surge in consumer spending — which was capped by a 0.7% rise in December — also predated the extension of the Bush tax cuts and the accompanying cut in the payroll tax, suggesting that people’s outlays may well be growing even faster in the current quarter.

Besides the contribution by consumers, other components of the GDP advanced, too. As a result, final sales rose by a thumping 7.1% pace — the biggest quarterly increase for this measure since 1984.

Business was most likely unprepared for this surge in demand, since lots of goods were sold from stock. Inventory liquidation last quarter subtracted a massive 3.7 percentage points from the fourth quarter’s rate of growth.

[...]

.....we've been recovering from the time the crash started <omitted to maintain your status as the local pass-around> don't start using your brain your, you're a natural... we've been recovering forever <omitted to maintain your pass-around status>... pay attention because you're late to the party once again OF2. We need you baby, the price of Vaseline is going up!

You know your duty here at PO.com and take it like a pro, regardless of the price of Vaseline!

[ColossalContrarian]

Your Xeno friend could even change his name to VaselineFinder2.

[bratticus]

Sure if you take away the M3, become a pathological liar with an obsession on inflation not happening, perpetuate a chronic inflationary monetary policy (QE) and don't adjust the currency for any inflation the GDP is higher than it was before.

[Roy]

Sure if you take away the M3, become a pathological liar with an obsession on inflation not happening, perpetuate a chronic inflationary monetary policy (QE) and don't adjust the currency for any inflation the GDP is higher than it was before.

XZACTLY!

Chris Martenson does a nice primer on GDP/CPI ( http://www.chrismartenson.com/crashcourse/chapter-16-fuzzy-numbers ) and how they are manipulated. And how they're not inflation adjusted. Denninger does a good job in pointing out how gov deficit spending has artificially propped up the bogus GDP and CPI numbers OF2 and his comrades in the MSM like to tout.

The US gov will say or print anything to perpetuate the status quo for as long as possible. In my opinion they have no credibility and their statistics are manipulated to make their wrongheaded and myopic policies look good. It's all PR now, as no amount of obfuscating or lying can hide the fundamental truth that:

YOU CANNOT BORROW YOURSELF TO PROSPERITY! YOU CANNOT SPEND YOURSELF RICH!

Egypt may just be a little 'peak' into the future for us Americans.

[OilFinder2]

Business was most likely unprepared for this surge in demand, since lots of goods were sold from stock. Inventory liquidation last quarter subtracted a massive 3.7 percentage points from the fourth quarter’s rate of growth.

[...]

Predictiably, the drawdown in inventories we saw at the end of last year is now resulting in a surge of new factory orders. Out today, the ISM manufacturing index reached a 7-year high:

LINK

Feb. 1, 2011, 10:35 a.m. EST
ISM factory index jumps to 60.8% in January
Highest reading for U.S. manufacturing gauge since May 2004
By Greg Robb, MarketWatch

WASHINGTON (MarketWatch) — Activity at the nation’s manufacturers in January accelerated to the fastest pace seen since May 2004, according to a closely followed survey of top executives released Tuesday.

The Institute for Supply Management index rose to 60.8% in January from 58.5% in December.

It marked the 18th straight month of expansion in factory activity, as the manufacturing sector continues to outperform other sectors of the U.S. economy.

[...]

Fourteen of 18 industries as tracked by Tempe, Ariz.-based ISM were growing in January, led by petroleum, primary metals and apparel. Read the full survey.

January’s new-orders index also jumped, reaching 67.8% from 62% in December, the ISM’s data showed.

Production rose slightly, hitting 63.5% from 63.0% in the prior month.

There was good news on the jobs front as well, as the employment index improved to 61.7% from 58.9% in December.

[...]

[Outcast_Searcher]

Once again OF2, thanks for all the work and reporting data from the MSM, especially in the face of so much hostility from your many detractors.

I look forward to your DATA ORIENTED summaries/articles here of how the economy expands going forward (or not, as the case may be).

Again, as a moderate, I don't understand why summarizing economic data as reported by the MSM causes so many here to get so mad. It's just data. (yes, your slant is very optimistic - maybe that's the whole issue).

I believe that the primary case that many real constraints exist and are causing many BIG long term fundamental problems that the doomers are concerned about is valid. The rational thing would SEEM to be to integrate the real world data you present into one's reality - interpreting its overall weight and context (short and long term), as one deems appropriate -- instead of denying it and raging against it. (OTOH, maybe I'm retarded for finding the denial/rage counterproductive?)

For example -- the rising oil prices spurred by intense 3rd world demand WILL impose serious economic pressures if global economic growth continues apace (IMO). (No matter how much the first world might reduce its oil demand in the short term by half-assed measures like Obama mileage mandates by 2017, and that Xeno and his 5 or even 25 thousand buddies might help by purchasing wildly overpriced and hyped Chevy Volts or their ilk).

Now - what that means, how serious that is, and what the likely outcomes are (i.e. the reality/consequences) -- are of course certainly open to reasoned (or unreasoned) debate.

Doomers - don't the fundamental longer term peak oil / economic issues remain true whether, for example, US GDP grows at 2% or 5% in 2011, or am I missing something?

Cheers

[OilFinder2]

Thanks O.S.

January auto sales came out today, and as posted a week or two ago in the other thread, the good preliminary indications for the month did, in fact, carry through to the rest of the month.

And since this is a peak oil forum, I've highlighted a few notable individual model sales figures, demonstrating how much Americans are expressing their concern about peak oil and high gasoline prices with their wallets.

Not.

LINK

February 01. 2011 2:37PM
Detroit 3 report big January sales gains
Scott Burgess / The Detroit News

Trucks and crossovers helped propel Detroit's carmakers to double-digit sales increases for January.

Meanwhile, foreign carmakers also noted a strong sales month with Hyundai Motor America reporting a 58 percent increase in retail sales and a 22 percent jump in overall sales. Toyota Motor Co. reported a 17.3 percent jump, while Nissan North America had a 14.8 percent increase.

All three of Detroit's carmakers reported sales increases in January, compared to the same month last year.

With its 23 percent jump, Chrysler Group LLC reported its 10th consecutive month of year-over-year sales increases.

Chrysler's Jeep brand led the sales jump; every Jeep model reported a sales increase except the Jeep Commander, which is being discontinued. The all-new Jeep Grand Cherokee more than doubled its sales compared with last January, up 130 percent.

[...]

Ford's fastest selling vehicle in January was the all-new Ford Explorer. Ford sold nearly 8,000 units, increasing sales 73 percent compared to January last year. The redesigned Edge crossover also saw a 36 percent boost in sales.

[...]

Toyota reported a 14.7 increase in January sales for its car division, led by the compact Corolla topping more than 20,000 in sales. Its light truck division posted a 36.5 increase with the Rav4 providing the biggest volume boost and the fullsize Tundra pickup providing the largest percentage increase of 55.9 compared with last January.

[...]

[OilFinder2]

LINK

State Tax Revenues Rise for 4th Straight Quarter
State tax revenues rise at fastest pace in almost 4 years due to growing economy
The Associated Press
By CHRISTOPHER S. RUGABER AP Economics Writer
WASHINGTON February 1, 2011 (AP)

A new report says state tax revenues increased in the final three months of last year as the improving economy boosted income and sales taxes receipts.

Tax revenue increased 6.9 percent in the October-December quarter, according to the report from the Nelson A. Rockefeller Institute of Government, a research institute at the State University of New York. That's based on early data from 41 states. If revenues rise by that pace once all states have reported their data, it would be the fastest increase since the April-June quarter of 2006.

[...]