GDP grows 3.2% in first quarter:

[Skjellyfetti]

The economy grew 3.2% in the first quarter of the year, the Commerce Department reported Friday, another indication a steady, though modest, recovery has taken hold.

The annualized rate of growth of the gross domestic product -- the nation's total production of goods and services -- was down from the 5.6% rate of the last three months of 2009. But that had been expected as the effect of the federal government's stimulus policies peaked during that period.

"We're still running on the fumes of stimulus in the U.S. economy," said Diane Swonk, chief economist at Mesirow Financial in Chicago. "It's a recovery, but by any standard is still a muted recovery. But we're thankful to have what we've got," given the depth of the recession, she said.


The median forecast for first quarter GDP was 3.4%, according to a survey of economists by Thomson Reuters, and Friday's figure fell below that. But that projection reflected more bullish sentiment about the economy in recent weeks. The National Assn. of Business Economics had forecast in February that first-quarter GDP would be 3%.

The GDP growth rate released Friday by the Commerce Department's Bureau of Economic Analysis is only modest, but still is a dramatic improvement over the same period last year. At the bottom of the recession, the U.S. economy shrank 6.4% in the first quarter of 2009.

That was the low point for the deepest recession since the 1930s, which began in December 2007. Economic growth returned last summer when the third-quarter GDP increased at an annualized rate of 2.2%.

"I think its well in line with expectations," Swonk said of the first-quarter figure. "The recovery's more broad-based. Although the momentum slowed quite a bit from the fourth quarter, the consumer showed up and we had a lot of demand, which is good."

The Bureau of Economic Analysis said growth was boosted in the first quarter by consumer spending. Real personal consumption expenditures increased 3.6%, compared with a 1.6% increase in the last three months of 2009.

Despite three straight quarters of economic growth, the recession still has not been declared officially over. The National Bureau of Economic Research, which determines the lengths of business cycles, said this month that it "would be premature" to set a date marking the end of the recession and the start of an economic expansion.

A major reason for that decision was the still-high unemployment rate.

Although job growth returned in March, with the economy creating 162,000 jobs, the national unemployment rate remained at 9.7%. The figure is higher in many states, including California, which reached a new high of 12.6% in March, tied for third-worst in the nation. The state trailed only Michigan's 14.1% jobless rate and Nevada's 13.4% figure, and was tied with Rhode Island.

"At the end of the day, none of this really matters unless we can get the employment machine going, which is coming, but very slowly," Swonk said.

http://www.latimes.com/business/la-fi-g ... 5577.story" onclick="window.open(this.href);return false;

[CitadelGrad]

No, it grew at an annualized rate of 3.2% in the first quarter. The article is pretty pessimistic, considering that it comes from a rag that usually cheerleads for Obama.

[blueballs]

Good news but the economy is still very fragile and we've collectively got a long way to go.

[GannonFan]

Good news, and to be expected by now, but as the last paragraph in the quote says, it's all just numbers on a page unless there's real growth in terms of employment. I'm just not sure when we'll see something real positive in that regard, and that's the troubling part.

[danefan]

Good news, and to be expected by now, but as the last paragraph in the quote says, it's all just numbers on a page unless there's real growth in terms of employment. I'm just not sure when we'll see something real positive in that regard, and that's the troubling part.

A new sporting goods store just opened up near me. I went in today and was BSing with the manager. He said they had 865 applicants for 65 jobs. None of which pay more than $15 hr.

In a micro view - that aint good.

[blueballs]

Good news, and to be expected by now, but as the last paragraph in the quote says, it's all just numbers on a page unless there's real growth in terms of employment. I'm just not sure when we'll see something real positive in that regard, and that's the troubling part.

A new sporting goods store just opened up near me. I went in today and was BSing with the manager. He said they had 865 applicants for 65 jobs. None of which pay more than $15 hr.

In a micro view - that aint good.

ITA... pretty indicative of what's going on MOL nationwide.

[GannonFan]

Good news, and to be expected by now, but as the last paragraph in the quote says, it's all just numbers on a page unless there's real growth in terms of employment. I'm just not sure when we'll see something real positive in that regard, and that's the troubling part.

A new sporting goods store just opened up near me. I went in today and was BSing with the manager. He said they had 865 applicants for 65 jobs. None of which pay more than $15 hr.

In a micro view - that aint good.

Nope, that's terrible. I'd be scared to death to be unemployed right now - I wouldn't even know where to look. Scary times - it's been that way since early in 2008 and there's no end in sight.

[AZGrizFan]

How much of that 3.2% annualized growth was from government stimulus money?

[HI54UNI]

Just wait. If they pass cap and trade watch it come crashing down again.

[kalm]

How much of that 3.2% annualized growth was from government stimulus money?

Good question. And if not from stimulus then where? What industries are growing in the U.S.? We are overbuilt in retail as well as residential construction and will be for quite some time. And growth in the financial services sector equates to nothing other than moving money around. So where is real wealth and job producing growth going to come from? Without a trade policy that protects domestic manufacturing we might be screwed.

[bobbythekidd]

Boys I was out of work for almost 2 months. I didn't try really hard to get another job but I found a great one. I had to eat a bit of a pay cut, but better hours, enviroment, coworkers, company, etc etc. We are on the upswing.

After being at a standstill for so long, an upswing is inevitable. The first place you are going to measure an upswing is in retail transportation. It leads the sales by about 6-8 months. I can tell you that we are in for at least a year of improved growth in that area.

[CitadelGrad]

How much of that 3.2% annualized growth was from government stimulus money?

Good question. And if not from stimulus then where? What industries are growing in the U.S.? We are overbuilt in retail as well as residential construction and will be for quite some time. And growth in the financial services sector equates to nothing other than moving money around. So where is real wealth and job producing growth going to come from? Without a trade policy that protects domestic manufacturing we might be screwed.

So financial services don't contribute to GDP growth? Um, okay.

[kalm]

Good question. And if not from stimulus then where? What industries are growing in the U.S.? We are overbuilt in retail as well as residential construction and will be for quite some time. And growth in the financial services sector equates to nothing other than moving money around. So where is real wealth and job producing growth going to come from? Without a trade policy that protects domestic manufacturing we might be screwed.

So financial services don't contribute to GDP growth? Um, okay.

That's the point. Sustainable growth is the lesson we should be learning.

Z's question about deficit spending is a good example in that simply printing money and growing the national debt is not sustainable. But neither is the perpetual "growth" of the housing market or retail sector. Hence the term bubble economy in that "wealth" created is over-inflated in value, and then the bubble bursts. Was the American public really more wealthy a couple of years ago, or was our wealth debt driven, based on the availability of easy credit both personally and nationally?

The financial services sector representing a larger share of GDP is nice on paper but I think real wealth is produced through manufacturing. Perhaps measuring our standard of living and wealth as a nation shouldn't be tied to owning a McMansion and 4 TV's, 3 cell phones, 2 computers, 2 PSP's, and 2 gaming systems all manufactured overseas and purchased with plastic.

[CitadelGrad]

Has it occurred to you that the financial services industry provides the capital that is needed to produce what you call "real wealth"?

[kalm]

Has it occurred to you that the financial services industry provides the capital that is needed to produce what you call "real wealth"?

"Wealth is the abundance of valuable resources or material possessions or the control of such assets."

http://en.wikipedia.org/wiki/Wealth" onclick="window.open(this.href);return false;

Government backed toxic assets, bets on futures, and insurance contracts are not wealth.

[travelinman67]

...The financial services sector representing a larger share of GDP is nice on paper but I think real wealth is produced through manufacturing...

...Kalm becomes a Tman protege.



Rock on, Brother.

[CitadelGrad]

Has it occurred to you that the financial services industry provides the capital that is needed to produce what you call "real wealth"?

"Wealth is the abundance of valuable resources or material possessions or the control of such assets."

http://en.wikipedia.org/wiki/Wealth" onclick="window.open(this.href);return false;

Government backed toxic assets, bets on futures, and insurance contracts are not wealth.

Futures and insurance contracts are important tools for risk management, hence stability in capital markets.

[houndawg]

Has it occurred to you that the financial services industry provides the capital that is needed to produce what you call "real wealth"?

It's their customers that provide the capital. Financial services industry just moves it from this pile to that pile and keeps a little for themselves.

[CitadelGrad]

Has it occurred to you that the financial services industry provides the capital that is needed to produce what you call "real wealth"?

It's their customers that provide the capital. Financial services industry just moves it from this pile to that pile and keeps a little for themselves.

You seem to believe that the scope of what constitutes the financial services industry is far more narrow than it actually is. Still, the function you describe is necessary for the efficient distribution of capital and risk management.

[native]

...Sustainable growth is the lesson we should be learning.

Z's question about deficit spending is a good example in that simply printing money and growing the national debt is not sustainable. But neither is the perpetual "growth" of the housing market or retail sector. Hence the term bubble economy in that "wealth" created is over-inflated in value, and then the bubble bursts ...

There is a sustainable growth rate for housing, too, kalm. It's not the housing growth, per se, that caused the housing bubble. It's the combination of securitized mortgages and easy money.

[AZGrizFan]

...Sustainable growth is the lesson we should be learning.

Z's question about deficit spending is a good example in that simply printing money and growing the national debt is not sustainable. But neither is the perpetual "growth" of the housing market or retail sector. Hence the term bubble economy in that "wealth" created is over-inflated in value, and then the bubble bursts ...

There is a sustainable growth rate for housing, too, kalm. It's not the housing growth, per se, that caused the housing bubble. It's the combination of securitized mortgages and easy money.

Without securitized mortgages there's no viable place for financial institutions to invest their excess deposits. Without that alternative their interest rate offerings would plummet as they'd have no desire to attract deposits with no place to put them. It wasn't the "securitized mortgages" that caused the problem. It was the bundling of KNOWN crap and peddling it as AAA gold that led to where we're at.

[kalm]

"Wealth is the abundance of valuable resources or material possessions or the control of such assets."

http://en.wikipedia.org/wiki/Wealth" onclick="window.open(this.href);return false;

Government backed toxic assets, bets on futures, and insurance contracts are not wealth.

Futures and insurance contracts are important tools for risk management, hence stability in capital markets.

How'd that stability work while the derivatives market was exploding?

[kalm]

There is a sustainable growth rate for housing, too, kalm. It's not the housing growth, per se, that caused the housing bubble. It's the combination of securitized mortgages and easy money.

Without securitized mortgages there's no viable place for financial institutions to invest their excess deposits. Without that alternative their interest rate offerings would plummet as they'd have no desire to attract deposits with no place to put them. It wasn't the "securitized mortgages" that caused the problem. It was the bundling of KNOWN crap and peddling it as AAA gold that led to where we're at.

I agree with both of you, and as I indicated a BofA branch or Circuit City on every corner and McMansions on working class income is not sustainable. Tie that with everyone and their brother seemingly becoming real-estate agents, flippers, land barons, or general contractors, it's not too difficult to see why it crashed so hard.

[CitadelGrad]

Futures and insurance contracts are important tools for risk management, hence stability in capital markets.

How'd that stability work while the derivatives market was exploding?

What about the vast majority of the time when there is stability in the capital markets? Futures and insurance contracts were not the cause of the recent financial crisis. In fact, it was only a certain type of derivative that was involved.

[native]

Just wait. If they pass cap and trade watch it come crashing down again.

Even without cap-n-tax, the economy is already likely to come crashing down unless Obama changes his stripes and becomes a cheerleader for lower taxes, less government and less spending. Despite massive government intervention and "cheap" money, the current growth rate is oney half of what it was during the Reagan recovery of the eighties. Moreover, Obama's tax increases and the shock effect of higher gas prices have yet to hit the economy, and we will soon run out of "stmulus."

"...As for monetary policy, the Fed has held short-term interest rates at close to zero for 16 months. The only question is how soon and how high rates will rise. Meanwhile, Washington is raising costs for business by expanding its regulatory reach via tougher antitrust enforcement, mandates on health care and energy, more political limits on telecom investment, restrictions on bank lending, and much more. ..."



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