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Joe’s economy still healthy: GDP expands +2.9%

Discussion in 'Too Hot for Swamp Gas' started by citygator, Jan 26, 2023.

  1. BLING

    BLING GC Hall of Fame

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    That was also true. They were some of the only people that saw wage inflation *during* the pandemic.

    But I think that’s mostly filtered through the economy along with the other “stimulus”, and the excess savings has also now been diminished. I’ve seen varying reports as to how much “excess savings” the average American still has, but the general idea is that it’s shrinking.
     
  2. gatorpa

    gatorpa GC Hall of Fame

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    Many people in the construction and service industries saw their wages increase as well.
    Agree data shows the “excess savings” is shrinking, allegedly the Fed wants it smaller.

    For the record when I’m talking about stimulus I’m referring to all forms of fiscal stimulus not just the monies sent out as payments to individuals.

    I heard recently that much of the build back better plan with respect to infrastructure has not even started to be spent yet. Perhaps that delay will help if the economy really contracts like quite a few are predicting.
     
  3. citygator

    citygator VIP Member

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    Hilarious. It plummeted when the pandemic hit and bounced back to the trend line - that’s not crazy. And that’s one month. You’re out of room.
     
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  4. g8trjax

    g8trjax GC Hall of Fame

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  5. citygator

    citygator VIP Member

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  6. exiledgator

    exiledgator Gruntled

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    Actually it's not. it's monetary stimulus.
     
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  7. VAg8r1

    VAg8r1 GC Hall of Fame

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    Although I do have sympathy for the person who was the focus of the first paragraph of the article, a 21-year old who lost his 10-year old used car through repossession overall I am not very empathetic since it looks to me like a lot of American consumers are purchasing cars that they really cannot afford.
     
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  8. BLING

    BLING GC Hall of Fame

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    Cars and rents have got to be especially brutal for that age group, esp if they don’t have parents that can help them out with their first car. With the chip shortages and used car demand going through the roof, I bet that made re-possessors all that more aggressive. To make matters worse a used car previously valued at $10k would probably be more like $15k to re-aquire something similar, but for a person with credit issues that is likely a moot point.

    People buying cars they can’t afford is nothing new, maybe it’s gotten more extreme.
     
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  9. g8trjax

    g8trjax GC Hall of Fame

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    Too bad they're not all EV's, the CDC could place a moritorium on reposessions.
     
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  10. VAg8r1

    VAg8r1 GC Hall of Fame

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    Kind of like the way the CDC placed a moratorium on foreclosures back in 2008?
     
  11. gatorpa

    gatorpa GC Hall of Fame

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    Fair enough basing on a strict definition, the end result is the same…
     
  12. gatorpa

    gatorpa GC Hall of Fame

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    Sure because when a global pandemic hits and many jobs and industries are closed we expect large groups of people to start buying expensive things like houses, that’s a normal thing to do when my job closes for an unknown period of time.:rolleyes:

    Look how long it took housing starts to get back to trend line with the last big pullback….
     
  13. rivergator

    rivergator Too Hot Mod Moderator VIP Member

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    Prospects for the global economy are improving, as worst fears fade
    https://www.washingtonpost.com/business/2023/01/30/imf-global-economy-improving/
     
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  14. gatorpa

    gatorpa GC Hall of Fame

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    Form the Wall Street Journal

    The U.S. Consumer Is Starting to Freak Out

    I
    t’s a stark turnaround from the second half of 2020, when Americans lifted the economy out of a pandemic downturn, helping the U.S. avoid what many economists worried would be a prolonged slump. Consumers snapped up exercise bikes, televisions and laptop computers for schoolchildren during lockdowns. When restrictions were lifted, they rushed back to their favorite restaurants and travel destinations.

    And they kept spending, helped by government stimulus, flush savings accounts and cheap credit, even as inflation picked up. Faced with four-decade-high inflation last year, Americans outspent it. Through most of 2022, consumer spending growth exceeded price increases by about 2 percentage points.

    Now the forces that helped keep spending high are unwinding, while inflation remains elevated. The share of monthly income Americans set aside for savings was 3.4% in December, down from 7.5% a year earlier and from a record high in April 2020. Credit-card interest rates have been rising, and Federal Reserve officials have signaled that they plan an additional quarter-percentage point increase to the central bank’s benchmark rate this week. That would bring the rate to between 4.5% and 4.75%, from near zero at the start of last year.”
    The U.S. Consumer Is Starting to Freak Out — The Wall Street Journal

    Here we go..
     
  15. WarDamnGator

    WarDamnGator GC Hall of Fame

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    Looks like we got the 0.25% that was expected.
     
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  16. duggers_dad

    duggers_dad GC Hall of Fame

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    Wildly conflicting headlines.
     
  17. oragator1

    oragator1 Premium Member

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    People had good savings from the last few years, they are expected to burn through that by around spring/summer on average. We will see what happens then.
    But so far, we still have high inflation (though it has stopped rising and even fallen a small amount), and now layoffs are coming, on top of the cost stresses on a lot of families.
    So I still don’t think we avoid a moderate downturn, just might take longer than experts expected.
     
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  18. AzCatFan

    AzCatFan GC Hall of Fame

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    Hard to say what will happened. We are at the end of the global pandemic, and it's truly unprecedented times. The layoffs are occurring, which is generally the last sign of a recession. At the same time, job openings are still at 11 million, which suggests the possibility of a soft landing if the recently laid off can land on their feet and find a new job quickly.

    Inflation does seem to be slowing down, and I think the Fed's thought of raising .25 is to ensure inflation doesn't pick up again. More cautionary than reactionary, maybe? In my opinion, unnecessary, but I understand where the Fed is coming from.
     
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  19. WarDamnGator

    WarDamnGator GC Hall of Fame

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    I don't know how accurate this is, but the fed's "nowcast" shows elevated monthly inflation expected for Jan. and Feb. of ~0.6, so maybe that played a part. Otherwise, it's been 7 or so months since we've had an elevated monthly inflation read.

    Inflation Nowcasting

    Edit: FWIW, the "Nowcast" projected 0.4 for Nov. and 0.5 for Dec., but the actual reads were 0.1 and -0.1.... so it doesn't seem to be very reliable. I guess we'll have to wait and see...
     
    Last edited: Feb 1, 2023
  20. Sohogator

    Sohogator GC Hall of Fame

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    Jerome Powell just confirmed. “We are experiencing disinflation”.