6 ms·

U.S. economy expands at 2.9% annual rate in fourth quarter

20 points by ecliptik 4y ago

mindcrime 4y ago
Is anybody having serious doubts about all of this "recession is imminent" talk? Despite the interest rate hikes, the economy still seems to be doing well ATM. As the old saying goes "Economists have accurately predicted 11 of the last 8 recessions".
- KptMarchewa 4y ago
  If anything, it will be caused by all of those companies that are trying to "prepare" before it.
  - mindcrime 4y ago
    Yeah, that's one unfortunate aspect of recession talk. It can become a self-fulfilling prophecy. That's not to say that there aren't issues: inflation being the obvious thing, and the corresponding interest rate hikes and the end of "cheap money" being another.
    - kjkjadksj 4y ago
      Don’t forget how housing prices have moved just in the last few months
- revlolz 4y ago
  There is a housing crisis on hand, people are struggling to afford food due to inflation, and hundreds of thousands have lost their jobs. The "normal" person who isn't a SV millionaire has been gouged on every angle since covid started with little to no protection from captured regulators. Oh, and we're in a proxy war with Russia. If you base your whole argument for recession off of Axios' year of year gdp change percentage you are hyperfixating a complex economic outlook and dumbing it down into a cherry picked metric that is showing up for any number of correlations such as return to work post lock downs. You can take a look at the quarter of quarter change https://fred.stlouisfed.org/series/GDP#0 https://fred.stlouisfed.org/series/GDP#0 In my opinion it doesn't align with axios' narrative.
  - sempron64 4y ago
    I would say that “normal” people are doing very well compared to last year as labor demand and wage rises at the low end are high, energy prices and food prices have come down, and housing is crashing in many areas. The upper middle class (i.e most software professionals on this site) and tech billionaires are having a shit year as tech stocks crash and weigh on the market. Don’t discount that you’re in an info bubble. The worst info bubbles are ones that affect the journalism industry and extremely online communities like the ones frequented by software engineers.
    - revlolz 4y ago
      I think you had a little projection there calling me in a bubble. Why don't we focus on what is actually happening instead discrediting who I am with assumptions. Wages are stagnant, energy costs are going up. Hourly Wages change yoy https://fred.stlouisfed.org/graph/?g=Zeb7 https://fred.stlouisfed.org/graph/?g=Zeb7 Energy Price Index https://fred.stlouisfed.org/graph/?g=Zebr https://fred.stlouisfed.org/graph/?g=Zebr >food prices have come down False, and before you blame the egg crisis on the reported avian flu, milk and bread demonstrate the same rise. Pick a product, it's gone up, PPI for all commodities shot up indicating macro changes to the economy (in this case reactions to inflation where producers raise rates) https://fred.stlouisfed.org/graph/?g=Ze8G https://fred.stlouisfed.org/graph/?g=Ze8G eggs https://fred.stlouisfed.org/graph/?g=Ze80 https://fred.stlouisfed.org/graph/?g=Ze80 milk https://fred.stlouisfed.org/graph/?g=Ze8b https://fred.stlouisfed.org/graph/?g=Ze8b bread https://fred.stlouisfed.org/graph/?g=Ze8h https://fred.stlouisfed.org/graph/?g=Ze8h >housing is crashing True, but not in ways that helps consumers. Landlords are doubling down and renting. Properties are sitting on market far longer than normal. Median sales price will decrease with interest rate changes, but with the root cause issue unresolved of lack of construction (supply), very large demand as the new generations age, and flippers and renter barons unchecked.. The housing market is not going to be affordable for low, middle, or even upper middle class citizens. I also think this kind of talk completely belittles how massive of a change occurred to housing prices in the last 5 years. Compare that to wage increases and viola, your normal every day person is in bad shape. median sales price https://fred.stlouisfed.org/graph/?g=Ze67 https://fred.stlouisfed.org/graph/?g=Ze67 Do you want anecdote? People aren't doing well. Go talk to your neighbors. A single corrective change percent movement from GDP reported by Axios is manipulative and a narrative article in my opinion.
- adam_arthur 4y ago
  So far recession has been narrative only. All current economic indicators have been quite strong... employment, GDP, retail sales, wage growth. Nominal GDP is running close to 10%, which is massive relative to recent history. There has been a pervasive media narrative that recession is imminent though. Many leading indicators are looking poor... survey metrics, shipping costs, growth rates have slowed (while still being strong). I consider these more "soft" datapoints though. A lot is a normalization of covid era excesses. It's pretty clear from history that Fed tightening cycles end in recession the vast majority of times, but my bet is that long end rates (10y) will have to spike again to at or above 4% before we trigger an actual recession. The market has frontrun it far too early which became self-defeating
  - mindcrime 4y ago
    A lot is a normalization of covid era excesses. Yeah, everything that went on during the "peak COVID era" has definitely flipped a lot of things around, and confused the issue in many areas. I expect that's one reason it's so hard right now to be sure what's really happening. The other thing that strikes me about this is that the fed has been looking for a good chance to start raising rates for a LONG time now. Interest rates have been running really low by historical standards for a long time IIRC, to the point that there was talk about the possibility of negative interest rates possibly being needed in response to some future economic downturn. They wanted rates up a bit to have "dry powder" to expend in response to the next (actual) recession. The risk, obviously, is the possibility of triggering a recession through that very act of trying to get rates back up to a "normal" level.
  - kjkjadksj 4y ago
    All the indicators except the mortgage to income ratio that has grown seemingly exponentially the last few months. A housing bubble alone is capable of setting off a recession certainly, and we are in a huge one.
    - adam_arthur 4y ago
      And it will eventually. But that's far down the line... prices are still well above the covid era bubble run. And the easing of financial conditions over the past few months has buoyed the previously declining housing metrics. Markets front ran the recession far too early, which led to the recession not happening. Now Fed likely has to hike even more than they would have otherwise
- comte7092 4y ago
  This forum is really strongly plugged in to the VC ecosystem (surprise) and that seems to dominate the narrative here. High interest rates are crushing the VC machine, but that’s an almost insignificant part of the overall economy. I don’t think there is much of any evidence that the broader labor market is going to ease anytime soon. Particularly given the fact that boomers are at the height of retirements.
- huitzitziltzin 4y ago
  Very few of us economists will actually say “yes an impression is going to happen next year.” Nearly always we say things like: “we believe there is an elevated probability of a recession over X period.” This isn’t to weasel out of taking responsibility. This is an extremely hard problem. (How many recessions have there been for which we have good data? Probably fewer than 20.)
- JakeAl 4y ago
  [flagged]
syzarian 4y ago
Some months ago a lot people on this site claimed Biden was full of it when he said we aren’t in a recession. I wonder how many will admit to being wrong on this.
- dangwhy 4y ago
  There goes my hope of buying a home. I was really hoping for a recession and housing market downturn. Stuff is still very expensive at the grocery store. I guess I still have my job despite layoffs, so I'll thank biden for that.
  - nine_zeros 4y ago
    Prices of houses are coming down due to interest rates. But a rise in interest rates doesn't mean an automatic recession.
    - dangwhy 4y ago
      > Prices of houses are coming down due to interest rates. Not where I live. I see markdowns of 10k on a 600k homes. Nothing really changed.
      - nine_zeros 4y ago
        That is a function of your local market. There are always going to be places that have faster price declines than others.
        Supermancho 4y ago
        Examples would be useful, rather than handwaving. Taking a look at the home value history for each... Random home in Southern CA: https://www.zillow.com/homedetails/1414-N-Center-St-Orange-CA-92867/25424365_zpid/ https://www.zillow.com/homedetails/1414-N-Center-St-Orange-C... Random home in Boulder CO: https://www.zillow.com/homedetails/175-Gold-Run-Rd-Boulder-CO-80302/13217081_zpid/ https://www.zillow.com/homedetails/175-Gold-Run-Rd-Boulder-C... Random home in Edmond OK: https://www.zillow.com/homedetails/7105-Robey-Dr-Edmond-OK-73034/21799447_zpid/ https://www.zillow.com/homedetails/7105-Robey-Dr-Edmond-OK-7... Random home in Jacksonville FL: https://www.zillow.com/homedetails/7226-Nottinghamshire-Dr-Jacksonville-FL-32219/71034808_zpid/ https://www.zillow.com/homedetails/7226-Nottinghamshire-Dr-J... I could go on, but I think the trend mentioned (~10% drop) is consistent across the US.
deleted 4y ago
[deleted]
ghostwriter 4y ago
[flagged]
Haga 4y ago
[dead]
globalreset 4y ago
Is this inflation adjusted? I doubt it.
- adam_arthur 4y ago
  Yes, nominal GDP is closer to 9%

20 points by ecliptik 4y ago

Is anybody having serious doubts about all of this "recession is imminent" talk? Despite the interest rate hikes, the economy still seems to be doing well ATM. As the old saying goes "Economists have accurately predicted 11 of the last 8 recessions".

KptMarchewa 4y ago
If anything, it will be caused by all of those companies that are trying to "prepare" before it.
- mindcrime 4y ago
  Yeah, that's one unfortunate aspect of recession talk. It can become a self-fulfilling prophecy. That's not to say that there aren't issues: inflation being the obvious thing, and the corresponding interest rate hikes and the end of "cheap money" being another.
  - kjkjadksj 4y ago
    Don’t forget how housing prices have moved just in the last few months
revlolz 4y ago
There is a housing crisis on hand, people are struggling to afford food due to inflation, and hundreds of thousands have lost their jobs. The "normal" person who isn't a SV millionaire has been gouged on every angle since covid started with little to no protection from captured regulators. Oh, and we're in a proxy war with Russia. If you base your whole argument for recession off of Axios' year of year gdp change percentage you are hyperfixating a complex economic outlook and dumbing it down into a cherry picked metric that is showing up for any number of correlations such as return to work post lock downs. You can take a look at the quarter of quarter change https://fred.stlouisfed.org/series/GDP#0 https://fred.stlouisfed.org/series/GDP#0 In my opinion it doesn't align with axios' narrative.
- sempron64 4y ago
  I would say that “normal” people are doing very well compared to last year as labor demand and wage rises at the low end are high, energy prices and food prices have come down, and housing is crashing in many areas. The upper middle class (i.e most software professionals on this site) and tech billionaires are having a shit year as tech stocks crash and weigh on the market. Don’t discount that you’re in an info bubble. The worst info bubbles are ones that affect the journalism industry and extremely online communities like the ones frequented by software engineers.
  - revlolz 4y ago
    I think you had a little projection there calling me in a bubble. Why don't we focus on what is actually happening instead discrediting who I am with assumptions. Wages are stagnant, energy costs are going up. Hourly Wages change yoy https://fred.stlouisfed.org/graph/?g=Zeb7 https://fred.stlouisfed.org/graph/?g=Zeb7 Energy Price Index https://fred.stlouisfed.org/graph/?g=Zebr https://fred.stlouisfed.org/graph/?g=Zebr >food prices have come down False, and before you blame the egg crisis on the reported avian flu, milk and bread demonstrate the same rise. Pick a product, it's gone up, PPI for all commodities shot up indicating macro changes to the economy (in this case reactions to inflation where producers raise rates) https://fred.stlouisfed.org/graph/?g=Ze8G https://fred.stlouisfed.org/graph/?g=Ze8G eggs https://fred.stlouisfed.org/graph/?g=Ze80 https://fred.stlouisfed.org/graph/?g=Ze80 milk https://fred.stlouisfed.org/graph/?g=Ze8b https://fred.stlouisfed.org/graph/?g=Ze8b bread https://fred.stlouisfed.org/graph/?g=Ze8h https://fred.stlouisfed.org/graph/?g=Ze8h >housing is crashing True, but not in ways that helps consumers. Landlords are doubling down and renting. Properties are sitting on market far longer than normal. Median sales price will decrease with interest rate changes, but with the root cause issue unresolved of lack of construction (supply), very large demand as the new generations age, and flippers and renter barons unchecked.. The housing market is not going to be affordable for low, middle, or even upper middle class citizens. I also think this kind of talk completely belittles how massive of a change occurred to housing prices in the last 5 years. Compare that to wage increases and viola, your normal every day person is in bad shape. median sales price https://fred.stlouisfed.org/graph/?g=Ze67 https://fred.stlouisfed.org/graph/?g=Ze67 Do you want anecdote? People aren't doing well. Go talk to your neighbors. A single corrective change percent movement from GDP reported by Axios is manipulative and a narrative article in my opinion.
adam_arthur 4y ago
So far recession has been narrative only. All current economic indicators have been quite strong... employment, GDP, retail sales, wage growth. Nominal GDP is running close to 10%, which is massive relative to recent history. There has been a pervasive media narrative that recession is imminent though. Many leading indicators are looking poor... survey metrics, shipping costs, growth rates have slowed (while still being strong). I consider these more "soft" datapoints though. A lot is a normalization of covid era excesses. It's pretty clear from history that Fed tightening cycles end in recession the vast majority of times, but my bet is that long end rates (10y) will have to spike again to at or above 4% before we trigger an actual recession. The market has frontrun it far too early which became self-defeating
- mindcrime 4y ago
  A lot is a normalization of covid era excesses. Yeah, everything that went on during the "peak COVID era" has definitely flipped a lot of things around, and confused the issue in many areas. I expect that's one reason it's so hard right now to be sure what's really happening. The other thing that strikes me about this is that the fed has been looking for a good chance to start raising rates for a LONG time now. Interest rates have been running really low by historical standards for a long time IIRC, to the point that there was talk about the possibility of negative interest rates possibly being needed in response to some future economic downturn. They wanted rates up a bit to have "dry powder" to expend in response to the next (actual) recession. The risk, obviously, is the possibility of triggering a recession through that very act of trying to get rates back up to a "normal" level.
- kjkjadksj 4y ago
  All the indicators except the mortgage to income ratio that has grown seemingly exponentially the last few months. A housing bubble alone is capable of setting off a recession certainly, and we are in a huge one.
  - adam_arthur 4y ago
    And it will eventually. But that's far down the line... prices are still well above the covid era bubble run. And the easing of financial conditions over the past few months has buoyed the previously declining housing metrics. Markets front ran the recession far too early, which led to the recession not happening. Now Fed likely has to hike even more than they would have otherwise
comte7092 4y ago
This forum is really strongly plugged in to the VC ecosystem (surprise) and that seems to dominate the narrative here. High interest rates are crushing the VC machine, but that’s an almost insignificant part of the overall economy. I don’t think there is much of any evidence that the broader labor market is going to ease anytime soon. Particularly given the fact that boomers are at the height of retirements.
huitzitziltzin 4y ago
Very few of us economists will actually say “yes an impression is going to happen next year.” Nearly always we say things like: “we believe there is an elevated probability of a recession over X period.” This isn’t to weasel out of taking responsibility. This is an extremely hard problem. (How many recessions have there been for which we have good data? Probably fewer than 20.)
JakeAl 4y ago
[flagged]

syzarian 4y ago

Some months ago a lot people on this site claimed Biden was full of it when he said we aren’t in a recession. I wonder how many will admit to being wrong on this.

dangwhy 4y ago
There goes my hope of buying a home. I was really hoping for a recession and housing market downturn. Stuff is still very expensive at the grocery store. I guess I still have my job despite layoffs, so I'll thank biden for that.
- nine_zeros 4y ago
  Prices of houses are coming down due to interest rates. But a rise in interest rates doesn't mean an automatic recession.
  - dangwhy 4y ago
    > Prices of houses are coming down due to interest rates. Not where I live. I see markdowns of 10k on a 600k homes. Nothing really changed.
    - nine_zeros 4y ago
      That is a function of your local market. There are always going to be places that have faster price declines than others.
      - Supermancho 4y ago
        Examples would be useful, rather than handwaving. Taking a look at the home value history for each... Random home in Southern CA: https://www.zillow.com/homedetails/1414-N-Center-St-Orange-CA-92867/25424365_zpid/ https://www.zillow.com/homedetails/1414-N-Center-St-Orange-C... Random home in Boulder CO: https://www.zillow.com/homedetails/175-Gold-Run-Rd-Boulder-CO-80302/13217081_zpid/ https://www.zillow.com/homedetails/175-Gold-Run-Rd-Boulder-C... Random home in Edmond OK: https://www.zillow.com/homedetails/7105-Robey-Dr-Edmond-OK-73034/21799447_zpid/ https://www.zillow.com/homedetails/7105-Robey-Dr-Edmond-OK-7... Random home in Jacksonville FL: https://www.zillow.com/homedetails/7226-Nottinghamshire-Dr-Jacksonville-FL-32219/71034808_zpid/ https://www.zillow.com/homedetails/7226-Nottinghamshire-Dr-J... I could go on, but I think the trend mentioned (~10% drop) is consistent across the US.

deleted 4y ago

[deleted]

ghostwriter 4y ago

[flagged]

Haga 4y ago

[dead]

globalreset 4y ago

Is this inflation adjusted? I doubt it.

adam_arthur 4y ago
Yes, nominal GDP is closer to 9%