US economic growth increased last quarter to a healthy 2.8% annual rate

https://apnews.com/article/economy-growth-inflation-gdp-consumers-federal-reserve-ffba812f747d18d1f09fcf804fe4eceb

by washedup • 2 years ago

18 32 2 years ago

apnews.com

dinkblam• 2 years ago

so 2.8% is "healthy" for the US, but 5.3% for China is a "disaster"...

washedup6• 2 years ago

The countries operate very differently, so yes, it's possible to view it that way and have it be a logical statement.

brigadier132• 2 years ago

It all depends on the size you are starting at and your population size.

passwordoops• 2 years ago

And expectations. If the US was coming off a year of, say 3.2% growth, or if the fed predicted 3.1% (I love how they never include margins of error) then this wouldn't be such a rosy picture.

verdverm• 2 years ago

I'm not sure how much people really trust the numbers coming out of Authoritarian countries.

There is also individual context to account for. Healthy metrics for a 20yo vs 80yo are very different

washedup6• 2 years ago

There are a lot of interesting details embedded in this number, specifically how strong consumer spending was.

I still have concerns about dwindling savings and increasing credit balances, as well as historically high APRs, but will worry about that another day.

vidanay2• 2 years ago

historically high APRs

Interest rates are NOT historically high. In fact they are basically right at "average". The rates for the last five years were historically LOW.

jeffbee5• 2 years ago

I think credit card APRs specifically are off the charts. Other forms of credit (mortgages etc) not so much. Credit card issuers are commanding a 15% margin over prime rate, while charge-off i.e. the risk to the credit issuer is around 3%, near all-time lows. In other words credit issuers are raking in record unearned profits.

This FRED series only goes back 30 years but if you look at the Fed Statistical Abstract consumer credit tables, APRs in 1985 were < 19% and in 1980 were < 18% so 21% and higher are very exceptional.

https://fred.stlouisfed.org/series/TERMCBCCALLNS

washedup6• 2 years ago

Credit Card APRs, specifically, is what I was mentioning. They are historically high.

toomuchtodo3• 2 years ago

Consumer is tapped out, economy is flashing yellow warning light and the Fed needs to cut now. Lots of spending currently being driven by Boomers running off of assets and paying cash (~40% of consumer spending), but there is only so much of that. Per the Sahm rule and rising unemployment, we are approaching recession territory and the potential for a self reinforcing consumer demand destruction spiral (people lose jobs, pull back spending, more people lose jobs, even more spending gets pulled back, and so forth).

https://www.bloomberg.com/news/articles/2024-07-24/share-of-... | https://archive.today/l6ryx

https://www.philadelphiafed.org/surveys-and-data/2024-q1-lar...

https://www.bloomberg.com/opinion/articles/2024-07-24/the-fe... | https://archive.today/xcJP5

https://fred.stlouisfed.org/series/SAHMREALTIME

infotapeworm2• 2 years ago

Was about to link some of these. The feds own data certainly does not indicate a "healthy" market.

The fed also changed their own metric for inflation. It's a political play.

washedup6• 2 years ago

Thanks for theses - I will read! I agree there are still a lot of metrics pointing in the wrong direction.

throwint• 2 years ago

Lower interest rates now to create more jobs

washedup6• 2 years ago

More jobs... and cheaper mortgage rates. Hopefully later this year.

151552• 2 years ago

Cheaper mortgage rates equal more expensive housing - supply didn't magically increase.

Cheaper mortgage rates means institutional capital that was otherwise sitting on the sidelines in T-bills will be deployed directly into that remaining supply.

HarryHirsch• 2 years ago

Just start building already, 6.8 % for the 30-year fixed is well within historical precedent. High housing prices are a result of asset inflation for a product priced at the margin. Only way around that is to increase supply.

(Also consider this: there is nothing more unproductive than real estate - the stupid capital must be forced out of the mattress and into productive ventures.)

jeffbee5• 2 years ago

What are we going to do, resurrect dead guys to fill these jobs? Americans are dangerously over-employed at this point.

beej71• 2 years ago

Why, we'll have fewer babies and restrict immigration, of course.

toomuchtodo3• 2 years ago

Until workers in the US are making a living wage, pay affordable prices for their shelter and healthcare needs, and are not $500 away from a life changing economic event, wages must be driven higher and immigration must be restrained (even if this drives up costs and reduces profits). More job openings due to lower interest rates increases competition for workers, driving up wages.

Der_Einzige• 2 years ago

No, we had the ZIRP era for too long and there’s still too much stupid money in the economy. Let it burn itself out and let the economy reorient towards more efficiency which is what high interest rates force your economy to be.

Trying to call for rate reductions now would be so poorly planned I hope you never get anywhere near the federal reserves power structures.

washedup6• 2 years ago

I mostly agree with this, but why the sour tone?

infotapeworm2• 2 years ago

They're going to lower rates before the election. Then come Jan/Feb, the market is tanking, home prices will drop further, and the fed will start aggressively lowering rates.

lostmsu• 2 years ago

I read the whole article and still did not get if it's the real value growth or nominal.

wakawaka28• 2 years ago

This is bullshit. GDP includes government spending, and the government doesn't make anything besides debt.

jfengel• 2 years ago

Apart from the sanitation, medicine, education, wine, public order, irrigation, roads, the fresh water system and public health, of course.

US economic growth increased last quarter to a healthy 2.8% annual rate

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