Skip to comments.Vanity Question: Will today's massive upward revision to consumer spending push GDP figures higher?
Posted on 07/31/2018 7:42:19 AM PDT by dangus
This morning, the Bureau of Economic Analysis posted HUGE revisions to May's estimate of consumer spending (and very solid numbers to the first June estimate.) BEA now says consumer spending grew 0.5% in May. If it was exactly 0.5%, that would mean an annual growth rate of 6% for the month. This is an update from a passable but unexciting 0.2% initial estimate.
This did not take any growth away from the June consumer spending figure. In other words, it wasn't simply that growth simply took place earlier. Rather, there was more growth: June's spending growth reached the strong 0.4% consensus prediction.
So here's my question:
If this is truly new information, it would seem that VERY significant increases could be expected in the 2nd-quarter estimate of real GDP growth. Is this true? Or does the GDP rely on some other estimate of consumer spending which had already factored in the May surge?
Year-over-year core inflation (PCE, if that means anything to you) is now back below 2.0%, which would make it hard to justify any increases in interest rate targets by the federal reserve.
Same-store sales are 4.2% higher than last year. This is not adjusted for inflation, but is consistent with economic growth staying above 4%.
The MSM will ignore it.......................
Just wait until the July numbers come in.....
Everywhere I go I see smiles instead of frowns. You decide.
A better economy generally improves consumer cash which improves spending.
Obama, and his fellow liberals, didn’t know what drives an economy.
It is not at all uncommon for quarterly GDP figures to be revised up or down as more information is gained. Whether this causes an upward adjustment depends on whether it was factored into the GDP projection to begin with.
Happy to see some comments, but does anyone know an answer?
Back in early spring, I read some piece which the analyst had gone over numbers of the past fifty years. He estimated by January....2018 would be the best year since the early 1970s. He was counting in unemployment, new jobs, company profits, dividends to stock holders, lower bankruptcy rates, etc.
The question to ask here....could we sustain this through 2019 and 2020. Could there be five-million total new jobs by election-time 2020? ‘Unbridled optimism’ is something that we ought to utter every single morning. If we know someone unemployed....we ought to be helping that kid or that gal....find some job. The jobs are there.
>> Whether this causes an upward adjustment depends on whether it was factored into the GDP projection to begin with. <<
Thanks for an answer... but that’s exactly what I’m trying to figure out.
>> Could there be five-million total new jobs by election-time 2020? <<
Easily. We’re looking at 2 to 2.5 million new jobs per year, and there are still tens of millions of people who are voluntarily on the sidelines or underemployed. The employee-to-population ratio even for 25-to-55-year-olds is still 2.5% below late-90s peaks. The overall employment ratio probably will always be below late-90s peaks because of aging of the workforce, but the above-55 population includes tens of millions of workers who make more money by NOT working, and could likely be enticed to work by higher pay, flexible hours, better benefits, etc.
I think we could strong economic growth through the duration of Trump’s SECOND term.
Saw an article on Msn/Yahoo News yesterday talking about Declining Home Sales!, was a danger to the economy.
Buried in the article was that High-end sales above $4 million dollars are down in places like New York, California, and the Hamptons because of Uncertainties about Trumps new tax laws (High tax Dem States no longer get to deduct high state taxes from Fed Taxes).
Meanwhile, home prices for average working folks are rising because more people have more money to spend, and are buying homes instead of renting. That is BAD to the Socialists.
How much .gov debt was added, and has that been accounted for in the GDP?
If not, what is the growth after you subtract out the increased debt?
Not real confident the GDP numbers are real. Not that Trump is using any different accounting tricks than before, but it doesn’t make it right to say that the .gov sent 1.2 trillion more and then use that debt to say the economy expanded.
Two factors go into this decline story.
1. Rising interest rates. It’s scared a few folks into ‘waiting’.
2. Back about six months ago, a number of regions were talking about a limited inventory existing, in terms of homes for sale.
In general, if you bring up anything in California....it’s in somewhat of a spin. Fair number of people packing up and moving....lesser number interested in moving to California. I think you have to subtract that region from the numbers.
Probably. The numbers across the board are coming in so good that you almost can’t revise upward fast enough.
I’m here in PHX and on every single block there is construction and towers. In my town, we’re getting 250 people a month moving in.
Of course they wouldn't.. they're the same cretins who believe we didn't build it.
The REAL question is: How soon will The Fed decide that things are "too good" and step in with a massive rate increase? - October surprise?
“Buried in the article was that High-end sales above $4 million dollars are down in places like New York, California, and the Hamptons because of Uncertainties about Trumps new tax law”
Well, I would venture a guess that homes in the $4 million range would not be a problem because the owners/ new buyers have other means to lay off their tax burden elsewhere. We had the home across the road from us (Central Contra Costa County, CA) sell to a young couple from San Jose for $2.2 million a little over a year ago. They are pouring money into new landscaping, and making other improvements. Both adults work, they have a nanny/housekeeper, and they go off on weekends to their place up in the Tahoe area. So I don’t think the Trump Tax Plan is going to deter people here from buying up. The only thing that might change the picture would be if the RATs figure out a way to overturn Proposition 13, which would cause a doubling of property taxes. That action would collapse housing prices here in short order.
I’m in PHX as well, I am seeing a lot of temporary car tags on the freeways.... People are buying cars
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