5 ms·

US Growth Accelerates to 2.4% on Resilient Consumers, Companies

36 points by mfiguiere 3y ago

swagasaurus-rex 3y ago
As a consumer I would prefer less spending
- deleted 3y ago
  [deleted]
- digitaltrees 3y ago
  Then spend less.
  - pixl97 3y ago
    "And not getting less" is likely the part that's been left off.
djohnston 3y ago
Why is a household spending more money a good thing and not caused by rampant inflation? I don’t understand.
- JumpCrisscross 3y ago
  > Why is a household spending more money a good thing and not caused by rampant inflation? Because it's being driven by "current-dollar personal income increas[ing] $236.1 billion in the second quarter" [1]. Also, the "personal saving rate—personal saving as a percentage of disposable personal income—was 4.4 percent in the second quarter, compared with 4.3 percent in the first quarter.” Together, these data provide evidence for consumers spending from a position of strength, rather than being forced to. [1] https://www.bea.gov/news/2023/gross-domestic-product-second-quarter-2023-advance-estimate https://www.bea.gov/news/2023/gross-domestic-product-second-...
  - lockhouse 3y ago
    Doesn’t people saving more imply a low level of confidence in their economic future? Kind of like storing food for a long winter?
    - JumpCrisscross 3y ago
      > Doesn’t people saving more imply a low level of confidence in their economic future? In the long run "households reduce their savings rate when consumer sentiment is high" [1]. In the short run, "higher interest rate is associated with higher personal savings rates while increases in real disposable income are associated with declines in the savings rate." But households today aren't choosing to save rather than spend; they're increasing both. All while interest rates are high and household debt to GDP remains stable [2]. [1] https://www.researchgate.net/profile/James-Payne-4/publication/228224745_The_Long-Run_Relation_Between_The_Personal_Savings_Rate_And_Consumer_Sentiment/links/54d21ec60cf28370d0e1bc5a/The-Long-Run-Relation-Between-The-Personal-Savings-Rate-And-Consumer-Sentiment.pdf https://www.researchgate.net/profile/James-Payne-4/publicati... [2] https://fred.stlouisfed.org/series/HDTGPDUSQ163N https://fred.stlouisfed.org/series/HDTGPDUSQ163N
    - JohnFen 3y ago
      I don't know about most people (and assume I'm the odd one here), but when times are good, I dramatically increase the amount I'm saving. Times are good, after all, so I can set more aside without increasing any pain. When times are in-between good and bad, I save at a much slower rate (my baseline savings rate of 10% of my net income). Right now, that's what I've been doing -- but I think I'll be increasing the rate of savings here soon. Things seem to be easing. When times are bad, I'm more likely to dip into my savings. My saving rate isn't tied to where I think the economy will be tomorrow, it's tied to where my personal economic situation is in the moment. Basically, I don't vary my standard of living according to the state of the economy. I vary my savings rate instead.
- tonyedgecombe 3y ago
  The GDP growth figure is adjusted for inflation.
RyanAdamas 3y ago
GDP not outpacing inflation (2.97% last quarter) with such abysmal velocity (1.37%) is not great. It means money is moving slowly through the system because there is far more in the supply than in the past and the economic activity its generating is heavily influenced by price increases instead of confidence and surplus spending. How much of that spending is fueled by debt? How much of that is high interest debt? How much of the pullback is because of student-loan repayment looming? If the yield curve wasn't inverted I'd be more optimistic. Edit: This is an inaccurate assessment.
- JumpCrisscross 3y ago
  > GDP not outpacing inflation (2.97% last quarter) This is real GDP [1]. The 2.4% is inflation adjusted. [1] https://www.bea.gov/news/2023/gross-domestic-product-second-quarter-2023-advance-estimate https://www.bea.gov/news/2023/gross-domestic-product-second-...
  - RyanAdamas 3y ago
    Thank you, I am mistaken.
- AntiRemote 3y ago
  [dead]
say_it_as_it_is 3y ago
And managers will attribute these gains to everyone working back in the office again
- deleted 3y ago
  [deleted]
archo 3y ago
https://archive.is/JqRRr https://archive.is/JqRRr
lockhouse 3y ago
I feel like I’m being gaslit every time I hear how great the economy is. I’m spending so much more for basic essentials like food, gas, and rent that there isn’t nearly as much disposable income and money left to save and invest as there was a few years ago. I’ve even received a few pay raises in that time, but they haven’t come close to keeping up with inflation. Maybe the people that think it’s a good economy don’t have kids to feed?
- Eumenes 3y ago
  Prob because this is financial news for wall street and boglehead types, not your average Joe. But I agree - I feel the press is very optimistic about things w/o going deeper into the systemic problems.
  - lockhouse 3y ago
    What blows my mind is that Joe Biden and his administration have been talking about “Bidenomics” and touting the current economy like it’s a strength for him going into reelection instead of a liability. I just can’t wrap my head around that. Are we living in the same America? It really feels like I’m being gaslit.
    - jazzyjackson 3y ago
      The party in 1984 was proud to increase chocolate rations.
    - tekla 3y ago
      Because in every metric the economy is doing well.
      - lockhouse 3y ago
        Those metrics are disconnected from middle class reality.
        3y ago
psychphysic 3y ago
The entire world is choking and the US economy is just chugging along. I don't live in the US, I had a friend recently disclose that she uses a food bank more than once a month. If some politician came along and offer a MAGA approach to my country I'd vote for them.
- rok3 3y ago
  What would a "MAGA" approach look like for your country?
  - Eumenes 3y ago
    mXga, solve for X
  - psychphysic 3y ago
    Probably stop spending tax money on weapons for Ukraine and spend it on the NHS. The US has the extraordinary economy to afford it. We can't even support single parent families with enough to eat.
- tonyedgecombe 3y ago
  >If some politician came along and offer a MAGA approach to my country I'd vote for them. Then you should educate yourself on what populist politicians promise and what they end up delivering.
  - psychphysic 3y ago
    Eh, better be promised something you want and risk it not being delivered. Then promised the opposite and get that for sure.

36 points by mfiguiere 3y ago

swagasaurus-rex 3y ago

As a consumer I would prefer less spending

deleted 3y ago
[deleted]
digitaltrees 3y ago
Then spend less.
- pixl97 3y ago
  "And not getting less" is likely the part that's been left off.

djohnston 3y ago

Why is a household spending more money a good thing and not caused by rampant inflation? I don’t understand.

JumpCrisscross 3y ago
> Why is a household spending more money a good thing and not caused by rampant inflation? Because it's being driven by "current-dollar personal income increas[ing] $236.1 billion in the second quarter" [1]. Also, the "personal saving rate—personal saving as a percentage of disposable personal income—was 4.4 percent in the second quarter, compared with 4.3 percent in the first quarter.” Together, these data provide evidence for consumers spending from a position of strength, rather than being forced to. [1] https://www.bea.gov/news/2023/gross-domestic-product-second-quarter-2023-advance-estimate https://www.bea.gov/news/2023/gross-domestic-product-second-...
- lockhouse 3y ago
  Doesn’t people saving more imply a low level of confidence in their economic future? Kind of like storing food for a long winter?
  - JumpCrisscross 3y ago
    > Doesn’t people saving more imply a low level of confidence in their economic future? In the long run "households reduce their savings rate when consumer sentiment is high" [1]. In the short run, "higher interest rate is associated with higher personal savings rates while increases in real disposable income are associated with declines in the savings rate." But households today aren't choosing to save rather than spend; they're increasing both. All while interest rates are high and household debt to GDP remains stable [2]. [1] https://www.researchgate.net/profile/James-Payne-4/publication/228224745_The_Long-Run_Relation_Between_The_Personal_Savings_Rate_And_Consumer_Sentiment/links/54d21ec60cf28370d0e1bc5a/The-Long-Run-Relation-Between-The-Personal-Savings-Rate-And-Consumer-Sentiment.pdf https://www.researchgate.net/profile/James-Payne-4/publicati... [2] https://fred.stlouisfed.org/series/HDTGPDUSQ163N https://fred.stlouisfed.org/series/HDTGPDUSQ163N
  - JohnFen 3y ago
    I don't know about most people (and assume I'm the odd one here), but when times are good, I dramatically increase the amount I'm saving. Times are good, after all, so I can set more aside without increasing any pain. When times are in-between good and bad, I save at a much slower rate (my baseline savings rate of 10% of my net income). Right now, that's what I've been doing -- but I think I'll be increasing the rate of savings here soon. Things seem to be easing. When times are bad, I'm more likely to dip into my savings. My saving rate isn't tied to where I think the economy will be tomorrow, it's tied to where my personal economic situation is in the moment. Basically, I don't vary my standard of living according to the state of the economy. I vary my savings rate instead.
tonyedgecombe 3y ago
The GDP growth figure is adjusted for inflation.

RyanAdamas 3y ago

GDP not outpacing inflation (2.97% last quarter) with such abysmal velocity (1.37%) is not great. It means money is moving slowly through the system because there is far more in the supply than in the past and the economic activity its generating is heavily influenced by price increases instead of confidence and surplus spending. How much of that spending is fueled by debt? How much of that is high interest debt? How much of the pullback is because of student-loan repayment looming? If the yield curve wasn't inverted I'd be more optimistic. Edit: This is an inaccurate assessment.

JumpCrisscross 3y ago
> GDP not outpacing inflation (2.97% last quarter) This is real GDP [1]. The 2.4% is inflation adjusted. [1] https://www.bea.gov/news/2023/gross-domestic-product-second-quarter-2023-advance-estimate https://www.bea.gov/news/2023/gross-domestic-product-second-...
- RyanAdamas 3y ago
  Thank you, I am mistaken.
AntiRemote 3y ago
[dead]

say_it_as_it_is 3y ago

And managers will attribute these gains to everyone working back in the office again

deleted 3y ago
[deleted]

archo 3y ago

https://archive.is/JqRRr https://archive.is/JqRRr

lockhouse 3y ago

I feel like I’m being gaslit every time I hear how great the economy is. I’m spending so much more for basic essentials like food, gas, and rent that there isn’t nearly as much disposable income and money left to save and invest as there was a few years ago. I’ve even received a few pay raises in that time, but they haven’t come close to keeping up with inflation. Maybe the people that think it’s a good economy don’t have kids to feed?

Eumenes 3y ago
Prob because this is financial news for wall street and boglehead types, not your average Joe. But I agree - I feel the press is very optimistic about things w/o going deeper into the systemic problems.
- lockhouse 3y ago
  What blows my mind is that Joe Biden and his administration have been talking about “Bidenomics” and touting the current economy like it’s a strength for him going into reelection instead of a liability. I just can’t wrap my head around that. Are we living in the same America? It really feels like I’m being gaslit.
  - jazzyjackson 3y ago
    The party in 1984 was proud to increase chocolate rations.
  - tekla 3y ago
    Because in every metric the economy is doing well.
    - lockhouse 3y ago
      Those metrics are disconnected from middle class reality.
      - 3y ago

psychphysic 3y ago

The entire world is choking and the US economy is just chugging along. I don't live in the US, I had a friend recently disclose that she uses a food bank more than once a month. If some politician came along and offer a MAGA approach to my country I'd vote for them.

rok3 3y ago
What would a "MAGA" approach look like for your country?
- Eumenes 3y ago
  mXga, solve for X
- psychphysic 3y ago
  Probably stop spending tax money on weapons for Ukraine and spend it on the NHS. The US has the extraordinary economy to afford it. We can't even support single parent families with enough to eat.
tonyedgecombe 3y ago
>If some politician came along and offer a MAGA approach to my country I'd vote for them. Then you should educate yourself on what populist politicians promise and what they end up delivering.
- psychphysic 3y ago
  Eh, better be promised something you want and risk it not being delivered. Then promised the opposite and get that for sure.