Free Republic

What's a yield curve and why is it so important? Well, the curve itself measures Treasury interest rates, by maturity, from 91-day T-bills all the way out to 30-year bonds. It's the difference between the long rates and the short rates that tells a key story about the future of the economy. When the curve is wide and upward sloping, as it is today, it tells us that the economic future is good. When the curve is upside down, or inverted, with short rates above long rates, it tells us that something is amiss -- such as a credit crunch...

The Goebbels Ministry Of Truth is at it again... Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 2.2 percent in the third quarter of 2009, (that is, from the second quarter to the third quarter), according to the "third" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP decreased 0.7 percent. Notice a few things here. "Goods and Services produced by labor and property"? Uh, property produces things? Me thinks not. But we'll leave that...

Stocks Up Despite Downward GDP Revision By Sung Moss 12/22/09 - 09:51 AM EST NEW YORK (TheStreet) -- Stocks opened to the upside Tuesday, as investors appeared to discount data showing that the nation's economy grew at a slower pace than previously estimated during the third quarter. More on ^DJI Market Activity Micron Technology Inc| MU UPAlcoa Inc.| AA DOWNDow Jones Industrial Average| ^DJI UPThe Dow Jones Industrial Average rose 39 points, or 0.4%, to 10,453. The S&P 500 added 4 points, or 0.4%, to 1118, while the Nasdaq improved 11 points, or 0.5%, to 2248. A final revision on...

<p>In the popular view, the economy is not in recovery until the unemployment rate, the most political of lagging indicators, begins to decline. Finally now it has, slipping from 10.2 to 10 percent in November. US output has already been on the rise since the spring, in the face of sagging employment. Increases in productivity are offsetting diminishing man-hours of input. Conclusive signs of a turning point have yet to shake most commentators out of their gloom, and the vigor of the recovery continues to be questioned. All too typically, it's input (i.e. employment) rather than output that receives attention from politicians or ink from journalists.</p>

Planning Commission deputy chairman Montek Singh Ahluwalia was more optimistic about industrial output.“To get a growth rate well above10% is not just a base effect. There is an element of growth that is taking place which I hope will be sustained,” he said. Friday’s industrial data comes within days of buoyant overall economic growth numbers and indicates that the country should trot along towards recovery if farm output does not dip much in coming quarters. The positive momentum in the recovery is also reiterated by the latest car sales figures, which spurted 61% in November from a year earlier. Industrial...

GDP vs National Debt - The Raw TruthI am still mulling over the Bureau of Economic Analysis’ recent, erroneous, GDP projection after my last post Gross Domestic Product (GDP) Mumbo Jumbo. One aspect that was not addressed previously was the pace at which our National Debt is catching up to annual GDP.The question for today is what will Gross Domestic Product need to be in 2019 in order to keep pace with the Federal Government’s ruinous spending? And based on the answer to that, at what pace must the economy grow annually? If we add the CBO’s 2010 to 2019...

GDP vs National Debt - The Raw TruthI am still mulling over the Bureau of Economic Analysis’ recent, erroneous, GDP projection after my last post Gross Domestic Product (GDP) Mumbo Jumbo. One aspect that was not addressed previously was the pace at which our National Debt is catching up to annual GDP.The question for today is what will Gross Domestic Product need to be in 2019 in order to keep pace with the Federal Government’s ruinous spending? And based on the answer to that, at what pace must the economy grow annually? If we add the CBO’s 2010 to 2019...

India economy grows 7.9%, shatters forecasts By Penny MacRae (AFP) – 5 hours ago NEW DELHI — India reported its best growth figures in 18 months on Monday as government spending and record low interest rates helped Asia's third-largest economy rebound from the global financial crisis. The 7.9-percent expansion in the quarter to September from a year earlier far eclipsed market forecasts and prompted the government to raise its growth expectations for the financial year to March 2010. The growth figures, which underscored Asia's role in spearheading the global recovery, also stoked speculation about when India would begin exiting stimulus...

Gross Domestic Product (GDP) Mumbo Jumbo Give me a break!Worthless Government StatisticsIt was just back on November 3rd when the Bureau of Economic Analysis (BEA), a division of the U.S. Commerce Department, declared that Gross Domestic Product grew at an annual rate of 3.5% during the 3rd quarter of 2009. Then on November 23rd, the Bureau declared that the actual rate of growth for the 3rd quarter was only 2.8%. So the question that comes to my mind, loud and clear, is what exactly does that mean?First of all what it does NOT mean is that the economy grew at...

Preparing to write about yesterday's downward revision in third-quarter GDP, we were tempted to say the Obama Administration has hit a speed-bump on its promised exit out of the recession. -- snip --The panicked Democrats' biggest problem is that Congress and the President have erected the biggest overhang of economic policy uncertainty that anyone can remember.-- snip --Nurturing a fragile economic recovery into a durable expansion requires policies that restore public confidence and reassure investors, risk-takers and employers. The Democratic agenda is doing precisely the opposite, which is how you get subpar growth and fewer new jobs.

The American economy, the world's largest, grew by only 2.8 per cent between July and September, far below the original 3.5 per cent estimate. Although today's figures mean that the US has cemented its emergence from recession in the third quarter — leaving Britain as the only major economy in a full-blown slowdown — the rise in gross domestic product (GDP) is less than expected, with analysts forecasting a 2.9 per cent rise in services and output. GDP, a key gauge of a country's economic health, measures all goods and services produced by a nation. Figures were sharply revised down...

NEW YORK (CNNMoney.com) -- Economic growth was weaker in the third quarter than originally reported, according to government data released Tuesday. The gross domestic product, the broadest measure of the nation's economic activity, rose at an annual rate of 2.8% in the three months ending in September, according to the Commerce Department's first revision of the reading. The initial reading of the report a month ago came in with a 3.5% growth rate. The decline in the growth rate was expected, in large part because of a recent report showing a growing gap between the nation's imports and exports. Importing...

Diplomacy: If there's good news from Saturday's APEC summit, it's Asia's ninja blow to a global climate pact in Copenhagen. The dynamic region recognized the economy-killer for what it was and refused to commit suicide. Global summits galore have paid obeisance to the holy grail of a global pact binding nations to cut carbon emissions by 50% by 2050. President Obama, who is calling for a United Nations treaty in Copenhagen this December, said, "We're out of time" shortly before leaving for the Asia Pacific Economic Cooperation forum. So that's why Danish Prime Minister Lars Loekke Rasmussen, who leads the...

Despite the fact that headline "payroll" job losses are significantly smaller than earlier this year, the unemployment rate spiked to 10.2% in October. This is the highest since the aftermath of the brutal 1981-1982 recession, when the jobless rate peaked at 10.8%. Many are arguing that the unemployment rate is the better indicator and that the economy is still in a great deal of trouble. So it's time once again to look at how jobs data are calculated. The Labor Department uses two completely different surveys: the payroll (or "establishment") survey and the household survey. ..... ..... Instead, we notice...

There was no surprise with the announced third-quarter GDP for the U.S. economy (+3.5%), however, there was some personal disappointment for me. The disappointment relates to the fact that few, if any, commentators were willing to speak up and exclaim that “the emperor is wearing no clothes.” The reason that this is such a big disappointment is that the “official” number for U.S. Q3 GDP cannot withstand the slightest analytical scrutiny. So, allow me to analytically dissect this obviously fraudulent number. Let's start with the big picture. At the end of 2008, official GDP was -6.4%. This was also likely...

Source: Trade and TaxesRaymond L. Richman The U.S. Bureau of Economic Analysis issued a misleading report when it announced October 29, 2009, that annualized Gross Domestic Product, measured in 2005 prices, increased 3.5 percent from the 2nd quarter 2009 to the 3rd Quarter of 2009. The fact is that annualized GDP in the 3rd quarter was $13,014 billion compared with $12,901 in the 2nd quarter , an increase of 0.872, less than one percent. The number, 3½ , asserted by the BEA was obtained by multiplying 0.872 by 4, in other words by extrapolating the rate of increase in the...

Economy: As we said as far back as February, it was likely the U.S. economy would grow by the third quarter of this year. Well, it did - and the 3.5% rebound was better than expected. But hold the hallelujahs, at least for now. It's almost certain that the U.S. emerged from recession sometime during the summer, most likely in June. But those who want to credit the $787 billion "stimulus" package passed in February should likewise refrain from saying "I told you so." They include presidential adviser Larry Summers, who said last week that "thanks largely to the Recovery...

To hear President Obama crow in vindication of his Stimulus Bill, one would think the light at the end of the tunnel is visible on the economic front. Obama has taken credit for the third quarter GDP growth of 3.5% as well he should. However, we need to examine what that growth was based upon and whether it was a bona fide growth of the economy or the counting of stolen booty. The increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, private inventory investment, federal government spending, and residential fixed...

Here is a look at the key components of GDP, showing how much each one contributed or subtracted from growth in the third quarter, along with forecasts for how they will perform going forward. CONSUMER SPENDING HOW MUCH IT GREW: 3.4 percent rate in third quarter, best showing since early 2007. CONTRIBUTION TO OVERALL GDP: 2.36 percentage points of the 3.5 percent third-quarter growth in GDP came from consumer spending. Car sales alone represented 1 percentage point of total growth, reflecting the success of the government’s Cash for Clunkers program. PROSPECTS: This is the biggest question facing the fledgling recovery,...

Nothing’s Over: The Top Reason GDP Does Not Show Recovery By Rocky Vega 10/29/09 Stockholm, Sweden – In order to juice the US into recovery the economy has been stimulated all over the place. The mainstream media is wild with cheerleading that the 3.5 percent third quarter GDP growth is a sign that the day is saved. Is it? No. The single clearest reason the GDP figure is hugely misleading is the Cash for Clunkers program. That particular government hand out caused motor vehicle output to spike almost 160 percent when compared to last quarter. That’s easily the highest quarter...

Here's a riddle: If a scientist or engineer is laid off, does it affect gross domestic product? The third-quarter GDP figures, released on Oct. 29, showed the economy growing at a 3.5% annual pace, breaking a string of four consecutive negative quarters. The growth was driven mostly by a surge in the production of motor vehicles and other manufactured goods. This number was greeted by many economists and journalists as confirmations that the recession is over. What's more, the rise in real GDP, combined with a sharp fall in employment in the third quarter, implies that productivity also soared during...

Green shoots are blossoming, Obama is smiling and somewhere Bernanke is patting himself on the back. Folks, I am pleased to announce that things are looking very rosy and judging by the crooks traders driving the stock market it would appear they agree. BEA's report confirms the speculation well at least the headline that so many idiots economists on TV have predicted, things are getting better; GDP increased at an annual rate of 3.5 percent. Time to put that 401K back to work and buy another house. Let's look at the report: Real federal government consumption expenditures and gross investment...

Oh what a tangled web we weave.... Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 3.5 percent in the third quarter of 2009, (that is, from the second quarter to the third quarter), according to the "advance" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP decreased 0.7 percent. Looks good, right?Hmmmm.... or is it? Motor vehicle output added 1.66 percentage points to the third-quarter change in real GDP after adding 0.19 percentage point to...

The U.S. economy expanded in the third quarter for the first time in more than a year thanks to a bounce back in consumer spending, but a weak labor market is expected to keep the recovery subdued. Gross domestic product rose by a higher-than-expected seasonally adjusted 3.5% annual rate July through September, the Commerce Department said Thursday in its first estimate of third-quarter GDP.

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 3.5 percent in the third quarter of 2009, (that is, from the second quarter to the third quarter), according to the "advance" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP decreased 0.7 percent. The Bureau emphasized that the third-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 5)....

http://www.cnbc.com/id/30308959

WASHINGTON — It's about to become official: The recession is over — but not the pain. The government will release figures this week expected to show that the economy has awakened from its deepest slump since the 1930s and is in the early stages of a recovery. But the following week, the government will issue another set of figures expected to show unemployment continuing to rise toward and possibly above a clearly recessionary 10 percent. How can both be possible? The government releases third-quarter Gross Domestic Product figures on Thursday. Many forecasters say they will show GDP growing at an...

What Is It? Macroeconomics is the study of the behavior of the economy as a whole. Macroeconomic analysis broadly focuses on three things: national output (measured by gross domestic product (GDP)), unemployment and inflation. (For background reading, see The Importance Of Inflation And GDP.) National Output: GDP Output, the most important concept of macroeconomics, refers to the total amount of goods and services a country produces, commonly known as the gross domestic product. The figure is like a snapshot of the economy at a certain point in time. When referring to GDP, macroeconomists tend to use real GDP, which takes...

On Oct. 22, Beijing announced that gross domestic product grew by 8.9% in the third quarter of 2009 compared with the corresponding period last year. The National Bureau of Statistics also reported that growth for the first three quarters was up 7.7%. The 8.9% figure confirmed the economy's upward trend. Growth, according to official statistics, tumbled to 6.1% in the first quarter, well off the double-digit figures seen in 2007 and the first half of last year. The economy picked up during this year's second quarter, when it expanded 7.9%. Now it is clear that China will attain for 2009...

Few things cause the eye to glaze over more than economic statistics, particularly when discussing all but incomprehensible sums in the billions and trillions of dollars. There are two statistics which the public should be aware of more than others; they are 1) Gross Domestic Product (total economic output of the country); and 2) The Net Gross Domestic Product per Person (The GDP less the amount of government spending at all levels divided by the total population). The Net GDP per person recognizes the impact of federal, state and local spending on the economy. Ideally the net amount each citizen...

You have to play the game, but remember to keep your eye on the ball: as we've smoothly entered this earnings season, broad index plays are a bit inadvisable. There's the usual tango between earnings reports and future guidance, profits and revenues; but it's getting so hard to figure out which datum is leading the dance and which is following. How heavily are investors weighing profits, as the economy's thirsting for revenue growth to affirm a recovery? I posted an article a couple of weeks ago that discussed the Investor's Cycle of Psychology: The rally gained steam through short covering,...

Speaking before the Senate energy panel Oct. 14, the head of the Congressional Budget Office said that the cap-and-trade system included in the House bill would slow domestic economic growth slightly over the next few decades. By 2020, the nation’s gross domestic product may be off 0.25 to 0.75 percent, and by 1-3.5 percent by 2050, said CBO Director Douglas Elmendorf. Elmendorf noted that his estimates involve uncertainties and “do not include any benefits from averting climate change,” reports the Washington Post. President Obama and congressional Democratic leaders, by contrast, have said that a cap on carbon emissions would boost...

Today, the director of the Congressional Budget Office warned the Senate Energy and Natural Resources Committee that proposed climate change legislation would impose "significant costs" on America's GDP and employment. That’s not exactly what proponents had promised. According to CBO chief Douglas Elmendorf, the Waxman-Markey bill passed in the House last June would reduce GDP by between one and three quarters of a percent by 2020, and between 1 and 3.5% by 2050. To the average household that might equate annually to $160 by 2020 and $925 by 2050 – hardly the “cost of a postage stamp” promised by the...

Will increasing tax rates on the rich increase revenues, or hold back the economy? Mr. Hauser uncovered the means to answer these questions definitively. On this page in 1993, he stated that "No matter what the tax rates have been, in postwar America tax revenues have remained at about 19.5% of GDP." What a pity that his discovery has not been more widely disseminated. The chart nearby, updating the evidence to 2007, confirms Hauser's Law. The federal tax "yield" (revenues divided by GDP) has remained close to 19.5%, even as the top tax bracket was brought down from 91% to...

US economy dips at better-than-expected pace of 0.7 percent in spring, probably growing now WASHINGTON (AP) -- The recession faded in the spring with U.S. economic activity shrinking at a pace of just 0.7 percent, a better-than-expected showing that buttressed beliefs the economy is growing now. The small dip in gross domestic product for the April-June quarter follows the 6.4 percent annualized drop in the first three months of this year, the worst slide in nearly three decades. In the final quarter of last year, the economy sank at a rate of 5.4 percent The new reading on second-quarter GDP,...

There's lots of breaking economic news and more will break later this morning. First, revised GDP for the second quarter just got released. The economy shrank by .7%, which is better than the 1% shrink that was initially reported. On the other hand, ADP just released its jobs numbers for private employers. That number was worse than expected at 254,000. The consensus was 210,000. Meanwhile, despite continued lower rates, mortgage applications fell by 2.8%. Freddie Mac averages are below 5% for the first time in four months. At 9:45 AM ET, the Chicago Purchasing Managers Index will come out. At...

Gross Domestic Happiness? Why the French want to redefine economic growth. French President Nicolas Sarkozy recently said he wanted the nations of the world to stop using GDP, or gross domestic product, as the main measure of their economic performance. He wants them instead to work up another metric that takes into account not only economic production but such things as environmental quality and even time not spent in traffic—a sort of gross national satisfaction index. France has excellent reason to suppress GDP statistics. Since 1982, among developed nations, France has been a clear laggard in GDP growth. Mr. Domitrovic...

Federal, state, and local government spending will be 42 percent of U.S. gross domestic product in 2009, according to data from the Organization for Economic Cooperation and Development. That’s huge–more than 4 out of every 10 dollars of everything produced in America now gets channeled through governments. How does that compare to other advanced nations? Chart 1 shows that total government spending in the United States is somewhat less than the average of the 30 industrial nations in the OECD, but that the U.S. advantage is shrinking. During the 1990s, the U.S. government size was about 10 percentage points smaller...

And then...Presto! Just like magic through stimulus and some fancy footwork the economy begins to look like it is improving, but is it really? Knowing that stimulus money must eventually run out, that the number of American's out of work continues to grow, that Europe's unemployment is at 10 year highs, and that some Asian countries are starting to falter how can we believe this? We shouldn't and through our knowledge of that we should be looking for opportunities to capitalize on the bear market rally's turn around. In particular we should be looking to banking stocks, auto manufacturing stocks,...

Last week the Office of Management and Budget released its updated fiscal outlook for the next ten years. Called the Mid-Session Review (MSR), the report was eagerly awaited in light of the growing alarm at the seemingly unrestrained spending of the current administration. This alarm is growing so widespread and intense that it threatens to sink much of the president's program. Whether it comes to healthcare, cap-and-trade or various economic stimuli, their projected multi-trillion dollar costs are the number one concern on the minds of most voters. Knowing that more bad fiscal news would effectually doom his agenda, the president...

WASHINGTON (AP) -- The economy shrank at an annual rate of 1 percent in the spring, a better-than-expected showing and more evidence that the recession is drawing to a close. Many analysts believe the economy is growing in the current quarter, but they caution that any rebound will not be accompanied initially by rising employment. Jobless claims figures released Thursday were better than expected, but remain well above levels associated with a healthy economy. The Commerce Department's new estimate for the gross domestic product was unchanged from the initial figure it released last month. The drop, while representing a record...

Energy: With Ahab-like determination, environmentalists have once again blocked oil exploration in the American Arctic. They may just have succeeded in putting the American economy on ice.On Friday, a three-judge U.S. Court of Appeals Court panel in Washington, D.C., struck down the Bush administration's five-year plan for offshore oil and gas leasing off Alaska's northern coast. The plan was vacated, the panel ruled, because of allegedly insufficient environmental review because its "environmental sensitivity rankings are irrational." What is irrational is that despite a more than three-decade long record of environmental sensitivity at Prudhoe Bay and elsewhere, and despite booming polar...

Let’s analyze the economic condition of a hypothetical family – the Bailey’s (I don’t know too many Bailey’s, so I hope I’m safe with this one). The Bailey family is made up of a husband, wife, and two kids. Mr. Bailey is the sole income producer and Mrs. Bailey works even harder by homeschooling their two children. Tough times have befallen the Bailey household. Mr. Bailey used to have a net income of $50,000/year. His employer has recently cut his work hours down to 30 hrs./week and his “after taxes and deductions” hourly wage to $20/hour. Mr. Bailey works 50...

Cap-And-Trade: The administration likes to defend bad policies with analogies to the post office. New studies from a business group and the administration itself confirm that cap-and-trade belongs in the dead-letter bin.Along with Energy Secretary Steven Chu, Rep. Ed Markey likens the cost of the Waxman-Markey cap-and trade bill to "about a postage stamp a day," based on estimates made by the Congressional Budget Office and the EPA. But as we and others have shown, they arrive at this magical number in part by ignoring the hit on gross domestic product and employment that will occur. As Garret Vaughan, economist...

We are in a recession and our President has done something about it. What has he done? Spent well over a trillion dollars of other people's money, all borrowed. How well is that working now and how well have such "fixes" worked in the past? There is no real indication that our current recession is ending. The NBER dated the beginning of this recession based almost entirely on payrolls, which last peaked in December 2007. Payrolls have declined every single month since then, including the most recent month, July 2009. In July, payrolls declined by 247,000 jobs. That has been...

One particular quibble involves the relationship between electricity usage and industrial value added — another measure of output. The worry is that failings in the way official data are compiled may be generating results that are giving investors misconceptions about the health of China’s economy.

Over the last four weeks or so almost all major corporations announced their earnings, the second quarter GDP came out, and July's employment numbers came out. There's a lot to view positively about the numbers, however there is also still plenty of work to be done.

Administration officials have been touting the good news that gross domestic product fell at an annual rate of "only" 1 percent in the second quarter. We are glad GDP didn't fall by more, but the outlook is still not good. Government spending launders GDP numbers to make the economy look better off than it really is. In the second quarter, the private sector shrank at the alarming rate of 3 percent. The only reason total GDP did not fall by more than 1 percent is that real federal expenditures and gross investment soared by 11 percent in the second quarter....

The pumpers in the media will burn in Hell for dragging you (the sheeple) back into this market. Here's the truth on GDP, in pictures: . I updated the previous Ticker but this is important enough to put up as a separate post. I will maintain this quarterly as new releases come out; this is a new "staple" for The Market Ticker, where unlike the sell-side that is always trying to get you to buy I am concerned with the truth about our economy and deal in the facts, not hype. This is off Table 3B in the BEA's release...

Folks, it’s COMPLETE manipulation of the numbers taking place. Here are the facts to prove it: Here’s today’s GDP report: GROSS DOMESTIC PRODUCT: SECOND QUARTER 2009 (ADVANCE ESTIMATE). Please note that GDP is reported on a “Quarter-Over-Quarter” basis instead of “Year-Over-Year”. However, the number is “annualized” (multiplied by 4), and it is based off of the previous quarter’s GDP. Let’s crunch the numbers…. Please notice on the very first page of the report how first quarter GDP WAS REVISED TO -6.4% FROM ITS ORIGINAL -5.5%! In other words, ALL of the numbers for the second quarter were BASED ON the...