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U.S. GDP Grew at a 5.2% Rate in the Third Quarter, Even Stronger Than Indicated
- mc32 3y ago[flagged]
- andrewmutz 3y agoAmazing that the US economy is growing at a faster rate than the Chinese economy: https://www.reuters.com/world/china/chinas-q3-gdp-grows-49-yy-above-market-forecast-2023-10-18/ https://www.reuters.com/world/china/chinas-q3-gdp-grows-49-y...
- berserk1010 3y agoREAL, unofficial Chinese gdp is probably at near 0% or negative. you don't get 20-30% decline in all metrics like export, import, home price, tax revenue, land value, employment, salaries, etc etc and still have 5% gdp growth. There's a reason why Xi Jing Ping came begging for relief in APEC San Francisco. Which he got none.
- thisgoesnowhere 3y agoHow was he begging for relief?
- berserk1010 3y agoHe rarely travelled abroad in the last 4 years. He made a special trip to the home turf of US. The country that just choked their AI ambition He was trying to get American business to come back to China. Instead, not much deals happened. Furthermore, it was rumored that Goldman Sachs bought a seat at dinner with Xi, just to let him know that Goldman was selling huge amount of properties in China. He was also protesting US giving arms to Taiwan. Nothing happened.
- bsder 3y ago[flagged]
- cced 3y ago[flagged]
- radicaldreamer 3y agoThese aren't the Epoch Times forums or weird WeChat groups, please source your claims and innuendo b/c this doesn't contribute anything worthwhile to the discourse.
- hmm37 3y agoLOL. That's exactly what China states about the US, when the US sent multiple high up officials to China prior to Xi's trip to San Fran., in order to pave the way for Xi to come to the US because Biden was begging to meet with Xi. I guess it's all a matter of perspective.
- berserk1010 3y agoOne country has a 22% youth unemployment rate, before stopped reporting. Another country has a 8% youth unemployment rate. One country has the primary investment sector being real estate, where their top 2 companies are bankrupt. Another country has the primary investment sector being stock market, where their tech top company is worth 30 of the other country's top tech companies. Easy to figure out which one was begging for money
- refurb 3y agoJuxtapose the "warrior wolf diplomacy" of not even a year ago with the hat-in-hand meeting with Biden in San Francisco. Xi bet he could stare down the US and win. He lost that bet.
- mkii 3y agoIn your world, what would a Xi victory have looked like?
- refurb 3y agoI think the intention was clear? To have the US back down. China wants to be the dominant power in Asia. It despises the US alliance (Japan, South Korea, Philippines, Taiwan, Vietnam, Indonesia, Malaysia, Australia) that projects force along the entire Pacific Rim. However, much of China's growth is dependent on trade with the US and its allies. So it's in a bit of a pickle. Xi thought China could win the political battle without losing the economic one. He assumed the alliance would split apart, and the US would be forced to back down. At that point China would be free to project it's power across most of Asia without interference from the West. Whether that's taking back Taiwan, or at least the entirety of the nine-dash line islands. The US or any other foreign vessel couldn't transit the South China sea without the OK from China. He tried to pick off the members of the alliance one by one (the trade battle with Australia is a great example), but failed. Eventually the US and other nations said "enough is enough" and instituted sanctions on China. In addition private companies decided the political uncertainty was too high a risk. Combine that with the demographic bomb the country is facing, the debt-bomb from Chinese real estate and Xi realized he lost his gamble. The Chinese economy couldn't survive long enough under sanctions for China to win the political battle. But to be honest, he burned too many bridges. The Chinese economy is struggling. The embargo on technology is going to hurt China way more than it hurts the West. He came to San Francisco in hopes of repairing enough of the relationship as to not entirely sink the Chinese economy.
- fancl20 3y agoIt's not that clear and much more complex. If you follows the whole history of China's foreign policy, it's surprisingly consistent and the focus is never "competing with someone". To the topic of ‘Wolf Warriors’, the policy dropped as early as May 2021 so it's highly possible that the change itself is not economic related (https://thediplomat.com/2022/01/is-china-putting-wolf-warriors-on-a-leash/ https://thediplomat.com/2022/01/is-china-putting-wolf-warrio...). The targeted audience (of the foreign policy) may not be the West, but global south. There is a paper (I'm too lazy to find the link) claim that the ‘Wolf Warriors’ rhetoric used by China's diplomats in non-west country doesn't change much. If you are intrested in the changes under Xi, Kevin Rudd has a series of deep analysis: https://viet-studies.net/kinhte/WorldAccordingtoXi_FA.pdf https://viet-studies.net/kinhte/WorldAccordingtoXi_FA.pdf. Generally China's decision making process doesn't care too much about winning or competing or any particular goal especially in short term. They are based on long-term analisys of "what will happen inevitably" and back track from that conclusion. Many of these decisions make no sense from West's perspective under a cost-benefit analysis.
- humanxperiments 3y ago[flagged]
- cced 3y agoTrust me bro
- somenameforme 3y agoDeficit spending is considered part of the GDP. Print a quadrillion dollars and we could have thousands of percent GDP growth! Part of the reason that GDP can be a highly misleading metric. The article alludes to this in a pretty amusing way: --- "The U.S. economy grew at an even stronger pace then previously indicated in the third quarter, the product of better-than-expected business investment and stronger government spending. ... Government spending also helped boost the Q3 estimate, rising 5.5% for the July-through-September period. However, consumer spending saw a downward revision, now rising just 3.6%, compared with 4% in the initial estimate." ---
- candiddevmike 3y agoYea everywhere is glossing over this... What would the GDP be without government spending? How much longer can the government float the economy?
- exclusiv 3y agoNot much longer when interest rate payments are well on their way to $1T per year ($659 billion as of October), the bulk of the budget (66%) is non-discretionary and unfunded liabilities are $211T.
- 4death4 3y agoGDP is inflation adjusted, so simply printing money won't work unless you also control inflation (although I will say I don't think the inflation calculation necessarily reflects the true value of the dollar).
- brnaftr361 3y agoInflation adjusted, but lended money is accounted for as growth isn't it? Which itself is often "printing money".
- ptero 3y agoInflation from money printing can be lagging compared to the effect on GDP (depending on how the printed money is distributed). Not saying that this is what we have today, just pointing out the possibility.
- magnio 3y agoThe US reports GDP growth as annualized growth rate, which is the annual rate that would occur if the QoQ rate is maintained for a full year. To get the QoQ rate, we need to roughly divide the rate by 4 (not exact but not far off). This means the US GDP grew 1.3% in the third quarter, matching that of China. Have to say the concept of annualized GDP growth rate is kinda gobshite. Why would you report that instead of YoY and QoQ rates is beyond me.
- throwawaymaths 3y agoGDP is itself kind of a shite metric, annualizing a quarterly is just a drop in the bucket
- stefan_ 3y agoYes, we know what annualised means. People also report annualised inflation and many other things this way. Pick a metric, report it consistently, it really doesn’t matter too much exactly which you choose. (It is ironic you would compare to China because of course their GDP reports are made up. I’m sure they use non-annualised though!)
- John7149 3y ago[flagged]
- orangepurple 3y agoGiven this where do you think $VTI will land in Q1 24? Do you think we will see a 25% contraction (~annualized) like we saw Jan to Oct 2022? The huge November rally (this month) makes NO sense. I feel like the hammer is about to fall.
- candiddevmike 3y agoStudent loan debt repayments started back up in September, you'd expect them to have some effect on spending habits that haven't surfaced yet.
- orangepurple 3y agoStudent loan debt repayments starting back up plus impending layoffs sounds like an impending engineered disaster which will significantly suppress stocks in Q1. I can't decide if it will trigger enough of a panic to dip $VTI under 190.
- idiotsecant 3y ago>Joe has been widely known manipulated election What does this mean, exactly?
- nopromisessir 3y ago[flagged]
- anonylizard 3y agoThe bad news is the US has a ballooning, titanic budget deficit that is at wartime levels and is completely unsustainable. Greece too can have booming economies when the government is raking up debt. The good news is there are genuine, revolutionary innovations in the economy, namely AI. You can't explain away AI as a mirage propped up by government spending. The entire stock market is held up by the magnificent 7, and these stocks in turn are held up investors' AI dreams.
- JohnMakin 3y agoHow will AI possibly help the economy? if it achieved even 1/10th of what the techno optimists think, you’ll see massive unemployment and likely collapse of credit markets that have been hanging on for a thread for a long time (like the trillions in student loan debt). I just can’t possibly see how AI is going to revolutionize the economy, unless you define the “economy” as the nasdaq, then yea, i guess so, but that’s a real simpleton view.
- GreedClarifies 3y agoAt a minimum it will automate which will increase productivity and almost certainly increase aggregate supply. In a more AI maximal case it will solve new problems, the increase in GDP from this case is very large.
- katbyte 3y agoYou didn’t address the main issue asked about: what happens with all the people out of work?
- cwalv 3y agoThey can keep working, just more effectively
- aurareturn 3y agoWhat happened when electricity put so many manual laborers out of work?
- tehjoker 3y ago[flagged]
- distortionfield 3y ago> lol so biden is juicing the economy for the election nice Right, the other three years he was just completely ignoring economic policy /s
- wholesomepotato 3y agoWhat's amazing about it if the debt increased more in the absolute terms? :D . If I max out credit cards I can at least show spending (GDP) growth at least the same as what I borrowed... How is it not obvious to everyone that this is the end game? Increasing rates will rapidly increase debt, which increases inflation, which pushes increasing rates ...
- avmich 3y agoWhoever's lived long enough in USA would laugh about end game questions. Inflation? 3.2% is absolutely peanuts to what it was some 3-4 decades ago. Unemployment? Are you kidding? Pandemics? Did you compare what it is today with what it was 2 years ago? COVID is just 4th - which is a lot, but very far from mortal danger - cause of death, and the country even inches up in life expectancy. All fundamentals are pretty much positive, and only debt/GDP is vaguely comparable to the worst numbers in US history. Now, what about alternatives? If you don't like US numbers, can you get anyplace better on Earth? I'll wait. Meanwhile, there are forward-positive questions and topics - USA is about to jump in 2, count 'em, two very consequential areas, which are AI and space exploration, within this decade. Are you sure your better bets are against USA? Did you take the history lessons into account, or it's business as usual?
- mkii 3y ago> Did you take the history lessons into account, or it's business as usual? Did we take the same history lessons? Lots of what led to the fall of the Roman Empire has been happening in USA the past few decades. And then we have China literally opium-warring us with fentanyl and killing tens of thousands of US citizens each year. But yeah, count on the cool shiny AI and space exploration to save the US.
- wholesomepotato 3y agoI'm sorry but most of your comment has nothing to do to what I said, and seems like random rambling. Except: > 3.2% is absolutely peanuts to what it was some 3-4 decades ago. But 3-4 decades ago governments, all institutions and economy as as whole were not so much in debt. https://fred.stlouisfed.org/series/GFDEGDQ188S https://fred.stlouisfed.org/series/GFDEGDQ188S . And this chart doesn't include all the "unfunded liabilities". You can hike rates to curb the inflation only if it doesn't bankrupt everything and everyone. And 3-4 decades ago boomers globally were ahead of most productive years of their lives, without the "baggage" of tons of kids and globalization had plenty of room ahead to increase productivity. I don't want to waste time talking about nonsense like AI and "space exploration". The financial system is screwed. That's all I'm saying.
- deleted 3y ago[deleted]
- uoaei 3y agoYour regular reminder that the US is the only country to represent quarterly GDP growth as an annualized rate.
- deleted 3y ago[deleted]
- rblatz 3y agoSo more interest rate hikes?
- appplication 3y agoGDP growth is not inflation and not something that needs to be intentionally limited, so not necessarily.
- somenameforme 3y agoWhile this is true, it's also true that GDP growth driven largely by governmental deficit spending, which this was, is inflationary.
- huytersd 3y agoHow do you know? Is there a breakdown of the percentage of the deficit spending?
- refulgentis 3y agoIt's true insomuch as aggregate spending being high drives inflation. Not necessarily government. More dollars, same goods. Not more gov't dollars, same goods.
- 1letterunixname 3y agoI'm betting is mostly due to inflation from the post-pandemic price-profit spiral. At one point, 60% of inflation was due to excessive corporate profits.
- phonon 3y agoThis already is the inflation adjusted number. Non-inflation adjusted was 8.9% growth. https://www.bea.gov/sites/default/files/2023-11/gdp3q23_2nd.pdf https://www.bea.gov/sites/default/files/2023-11/gdp3q23_2nd....
- 1letterunixname 3y agoAnd those numbers are themselves are de facto lies because they don't adequately represent the rises in costs of inelastic demand items such as food that harm individuals. "Macroeconomics" to the point of hiding harms to large swaths of C that aren't billionaires with C billionaires, G, I, and NX.
- rayiner 3y ago[flagged]
- MightyBuzzard 3y ago[dead]
- akomtu 3y agoThat's the chart of top 1% vs bottom 90%: https://fred.stlouisfed.org/graph/?g=G4YR https://fred.stlouisfed.org/graph/?g=G4YR
- judge2020 3y agoI do think the Fed's stunt with 2-3% interest rates in 2020-2022 was an effort to further concentrate wealth up the stack. Everyone who could buy/refinance did and will likely stop moving for the foreseeable future, as the same house would cost at least 33% more per month thanks to the higher interest rate alone.
- throwawaymaths 3y agoIncreasing interest rates should have the reverse effect. A lot of crazy financial instruments depend on low interest rates to work. When interest is increased, the price of money goes up; the wealthy are bouyed far more by ZIRP than someone say in the tenderloin, who does not have access to high finance.
- tomfunk 3y agowhat financial instruments?
- hammock 3y agoAny kind of carry trade, anything with leverage, even alternatives like crypto
- throwawaymaths 3y agoShorts, options
- judge2020 3y agoIncreasing rates is their attempts to bring inflation back to normal, since cheap money is cheap for _everyone_, including all Americans that were eager to get a low monthly payment on cars/houses (as I’ve alluded to), not just for existing collateral but for new homes/cars, thus increasing total demand - and that demand leading to price increases across the board.
- 7e 3y agoWe should really be trying to maximize a human happiness metric with the _minimum_ amount of GDP. Quantifying that is a challenge, but if we don’t start, we’ll never get there.
- The28thDuck 3y agoA free gaming console for every household!
- deleted 3y ago[deleted]
- SantalBlush 3y agoThe problem is, how do we accurately measure that happiness? Economists would be first in line to use that measure. They know GDP is flawed--unpaid domestic work isn't included, for example--but it's the best they have. There is a ton of econ literature stating as much. Using dollars spent as a measure of happiness is unfortunately the best we can do (so far).
- elashri 3y agoThe failure of this metric as measure of happiness is very obvious. I can be rich person (relatively rich not that rich) and are spending a lot of money on my health problems who are making my life hell. With such metric this indicates that I'm living my best days.
- jmye 3y agoI don’t think GDP is meant to be used on a personal level to measure happiness, nor do I think anyone is suggesting that as a valid use.
- tonyedgecombe 3y agoIt can apply across a whole economy though. You could argue half of the population is obese thanks to economic policies that improve GDP. That will impact gross national happiness.
- The28thDuck 3y agoNothing quite like closing the article on a zinger. “ Corporate profits accelerated 4.3% during the period, up sharply from the 0.8% gain in the second quarter.” Won’t anybody think of the corporations??
- distortionfield 3y agoThis is more and more why I think that layoffs are almost viral in nature. I swear to god, it gets in the air sometimes.
- Racing0461 3y agoUnemployment/GDP/<insert other stat here> are pretty much vanity metrics for the average family. Doesnt really mean anything if rent is double and gas is 5$ a gal. It's actually even more insulting when the gov is telling you how good you have it.
- 4death4 3y ago> It's actually even more insulting when the gov is telling you how good you have it. I agree that these aren't the best times the country has ever seen, but, objectively speaking, things are pretty good. Just as an example, gas is $5 a gallon (it's actually $3.40). But, where is it cheaper? Belarus? Is that really where you want to live?
- FpUser 3y ago>"But, where is it cheaper? Belarus? Is that really where you want to live?" Why the fuck would we compare our lives to Belarus, Zimbabwe Ethiopia / etc. Let them sort their own problems. I can compare my country (Canada) to what it was 30 years ago and I do not like where we are going.
- 4death4 3y agoOk, but compare yourself to the rest of the world. There's literally almost nowhere better to live than in Canada. You're assuming the current state is an aberration and that the status quo of the past is somehow obtainable. But most of human history has been profound suffering of the masses. More than likely, the good times of ol' are the aberration and aren't coming back. Another thing to consider: the entire wealth of Canada and the U.S. is predicated on a genocide. Yea, it turns out when you're not killing people and taking their land, it generally gets more expensive over time.
- somenameforme 3y agoIs that past an aberration or rather something we're actively destroying? We spent literally trillions of dollars on Iraq. By the time Israel and Ukraine are done, we'll also be into the trillions there. This is money that could have been used to have improve society in countless ways. Get humanity to Mars? Sure, it's literally a rounding error on the scale of the money we completely squander. Fund a million startups? Sure, why not? A trillion bucks can offer a million dollars to a million startups, which is kind of mind boggling to even think about. One can think of near to any cause, and they could all be exceptionally well funded with all the money we waste on war and geopolitics. Because war has this amazing magic trick. It can take a trillion dollars and just make it disappear, like it never existed, with nothing to show for it. Houdini couldn't hold a candle to that sort of wizardry.
- BenFranklin100 3y agoThis is good news but to sustain (or even increase) this growth, the US needs to address the housing crisis. The housing shortage is best viewed not so much as too few homes overall nationally, but too few homes in job-rich regions where people want to work and live. Hsieh and Morrietti estimated the resulting spatial misallocation of labor lowered aggregate GDP growth by 50% between 1964 and 2009: https://www.nber.org/system/files/working_papers/w21154/w21154.pdf https://www.nber.org/system/files/working_papers/w21154/w211... That is, businesses can’t find the needed local workers to expand, and workers lack access to good paying jobs. Remote work is helping, but still, the problem is estimated to have gotten much worse recently with the surge in home prices over the last 15 years. TLDR: fix the housing problem, and the economy will be able to sustain higher growth.
- jeffbee 3y agoThere's been some robust discussion about the Hsieh-Moretti result recently. These tweets link to some of it: https://twitter.com/otis_reid/status/1725610847072879030 https://twitter.com/otis_reid/status/1725610847072879030
- BenFranklin100 3y agoThanks, I recall there being some debate about the magnitude of the effect, but if recall correctly, some authors argued the problem was even worse than Hsieh-Moretti thought originally? Whatever the actual percentage, it makes intuitive sense a spatial misallocation of labor and capital will hurt economic growth.
- jeffbee 3y agoYou might be thinking of this earlier correction, which made their effect larger. https://www.econlib.org/a-correction-on-housing-regulation/ https://www.econlib.org/a-correction-on-housing-regulation/
- ethbr1 3y agoAdditionally, there's the problem of home ownership trending in the direction of exacerbating income disparities, by shifting rental income and property value gains to investors instead of new homeowners.
- elfbargpt 3y agoI saw a story today about a new Chinese cancer drug. It retails for 280 USD in China, and for 8,820 USD in America. American GDP growing 30x the rate of China's, incredible!
- cced 3y agoDon’t forget credit card interest payments! GDP! Student loan payments! That also goes towards GDP! Great products! 30 years of mortgage interest? You guessed it, GDP! Copium and GDP for everyone! Anyone look at PPP or is that metric too inconvenient?
- dr_dshiv 3y agoYeah, because with PPP China already has a bigger economy than USA. Edit for the downvoters: China’s 2022 GDP based on PPP is $31.5 trillion vs the USA’s $23 trillion. That’s 37% bigger. Source: https://www.worldeconomics.com/Country-Size/China.aspx https://www.worldeconomics.com/Country-Size/China.aspx
- cced 3y agoWow wow wow, that’s not the line!
- nonethewiser 3y agoPPP doesnt measure size of economy
- Iwan-Zotow 3y agoSure it does
- piva00 3y agoGDP (PPP adjusted) does, and that's what the comparison between China vs USA on the parent comment stems from. China's GDP (PPP adjusted) is ~USD 33 trillion. USA's GDP (PPP adjusted) is ~USD 27 trillion. Those are economies' size measures.
- valzam 3y agoIs this nominal or real GPD? It's not surprising that GDP can grow in a high inflation environment, doesn't mean anyone is better off for it.
- pcurve 3y agoBelieve it or not, real GDP. Straight from the BLS. "Real gross domestic product (GDP) increased at an annual rate of 5.2 percent in the third quarter of 2023 (table 1), according to the "second" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 2.1 percent."
- tenpies 3y agoI believe it, but only because I've also watched the adjustments to CPI methodologies. What I can't believe is that serious people still take the BLS's CPI number seriously.
- mkii 3y agoI'm pretty sure the average Joe would agree with you about the CPI numbers being a complete farce. It used to not matter when it was low. But after covid, when people, largely following the same habits over time, see their grocery receipts go up 15% yet the government quotes 7%, they're not going to forget that for a long time.
- bryanlarsen 3y agoIt's just innumeracy. Grocery prices are up 26% since 2019. The government isn't lying when it says 7% annually.
- phonon 3y agoNon-inflation adjusted was 8.9%. https://www.bea.gov/sites/default/files/2023-11/gdp3q23_2nd.pdf https://www.bea.gov/sites/default/files/2023-11/gdp3q23_2nd....
- hmm37 3y agoThe last I checked regarding Q3, was that most of the growth was due to consumption, but most of that consumption was fueled by debt. The prior Q2 consumption was suppressed, and it seems that everyone was forced to restart consumption in Q3.
- Iwan-Zotow 3y agoLess than $150BN until $34 trillion
- matthewfelgate 3y ago[flagged]
- apexalpha 3y agoCould it be that little war on the continent that cut off our energy supply while the US is energy-independent and even exporting?
- matthewfelgate 3y agoA contributing factor, but doesn't explain why the USA was pulling ahead years before the Ukraine war.
- huijzer 3y ago> Will Europe ever start asking why it is falling behind the USA? Compared to when exactly? The USA has played a major role in winning World War II when most Western European countries were occupied (read: lost already). Then, they funded the rise of the United Kingdom, France, and Germany through the Marshall Plan in 1948. Then, the USA pushed against Russia. Honestly, no Western democracy was really interested in becoming part of the Soviet Union, so having some USA backup was not bad. The USA flew circles around the Soviet engineering. Literally actually since the USA spy planes first flew too high for Soviet rockets to shoot down and when that didn't work anymore they flew too fast for Soviet rockets to shoot down. Then the USA military helped invent computer chips during the Vietnam war (a war which on itself is a bit more questionable, but okay), went to the moon first, and invented the internet. When in this story was Europe not behind the USA?
- TheCoelacanth 3y ago2008ish things were much closer. In 2008, US GDP per capita was comparable to many large western European countries with the US at $48k, UK $47k, France $45k, Germany $45k, Italy $41k, Sweden $56k. In 2022, the US was at $76k, UK $46k, France $41k, Germany $48k, Italy $34k, Sweden $56k.
- tim333 3y agoThere's been a lot of spending on credit cards and the like but default rates are heading up such that it quite likely won't go on like this that much longer. https://twitter.com/GameofTrades_/status/1728820920649670923 https://twitter.com/GameofTrades_/status/1728820920649670923
- lr1970 3y agoHow the inflation was factored in in calculation GDP growth? If inflation is under-counted than GDP growth will be artificially inflated.