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The US economy looks like it's getting even stronger
Topic Started: 3 Sep 2015, 02:34 AM (4,535 Views)
Mike
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There are clearly enough recessionary indicators around the world to feed investors’ concerns about a global recession. While they were fretting about this scenario yesterday, they ignored solid numbers coming out of the US suggesting that real GDP, which rose 3.7% during Q2, could be revised higher and followed by another solid gain during Q3. Consider the following:

(1) The value of construction put in place rose 0.7% m/m during July, and 13.7% y/y, to the highest pace since May 2008. Leading the way over the past year has been nonresidential construction (up 18%), with particular strength in manufacturing (73), amusement & recreation (60), and lodging (41). Construction of factories has been soaring into new record-high territory since January of this year.

(2) Motor vehicle sales jumped to a new cyclical high of 17.8 million units (saar) during August. Leading the way have been light truck sales. The former is up 2.8% y/y, while the latter is up 9.0%.



Read more: http://www.businessinsider.com/us-economy-getting-even-stronger-2015-9#ixzz3kb0DHXDG
http://mike-globaleconomy.blogspot.com.au/
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Andrew Judd
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If it is true that super low interest rates and QE are effectively zero sum, other than they encourage more risk taking, then it must now be true that it is time for US interest rates to rise. The result will then be zero sum other than there will be less risk taking while simultaneously signs of a growing economy must encourage more risk taking.

It almost seems totally unbelievable but we could be looking at several small rises in interest rates fairly quickly

Edited by Andrew Judd, 3 Sep 2015, 04:29 AM.
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Jimbo
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The USA has a currency problem. The US Dollar is at least 25% more valuable than it was a year ago against most major trading partners.

This makes imports cheaper and exports much more expensive.

So why would anybody start a manufacturing business in the USA? Maybe a year ago you might. The USD was nice and cheap, there was slack in the labour force. But not today.

Why would the Fed raise rates and strengthen the dollar further? Why do this when everybody else is loosening policy?

The answers used to be simple ten years or so ago. Lower rates and weaken the currency to stimulate growth, raise rates to keep inflation down.

But none of this works anymore. It hasn't worked since 2008. We have rates on the floor and non existent inflation at the same time. How will raising rates stoke growth and inflation?

Why will it suddenly begin to work now?

Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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b_b
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Good news. The upward revision may just get the US economy back to its 2.5% growth rate is achieved last year.

Meanwhile, the Atlanta Fed's GDPNow tracker is showing sub 1.5% growth for the 3rd Quarter.
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Mike
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The US economy expanded across most regions and industries in July and August, a Federal Reserve report showed, as tighter labour markets boosted wages for some workers.

Six of 12 Fed districts reported "moderate" growth, and five others said expansion was "modest," according to the Beige Book, released Wednesday in Washington. The survey is based on reports gathered on or before August 24 by regional Fed banks.

The report gives central bank officials, who next meet September 16-17, an anecdotal picture of growth as they consider lifting interest rates in an environment colored by market volatility and slowing growth in China.

Boston, San Francisco and Dallas districts specifically referenced the China slowdown as a source of weaker demand for some products, including chemicals, wood products and high-tech goods. The word "China" or "Chinese" was mentioned 11 times. It was not mentioned in July's report.

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"Most districts reported modest to moderate growth in labour demand," the Beige Book said, with this tightening in labour markets pushing up wages slightly in some industries, especially in the New York, Cleveland, St. Louis and San Francisco districts.

The Beige Book also showed that manufacturing activity was mostly positive, with only the New York and Kansas City Fed districts seeing declines.

Looking at the Beige Book overall, "from the Fed's perspective, this shouldn't change things one iota," said David Ader, head of government bond strategy at CRT Capital Group in Stamford, Connecticut. "The labor markets continue to do a little bit better, inflation continues to look a little bit weaker."

The US economy expanded at a 3.7 per cent annualised rate in the second quarter, an August 27 report showed, and employment has been rising at a steady clip. Officials will gain an additional month of labour data when August figures are released Friday in Washington.

While domestic economic data have been strong, global equity markets have been volatile in recent weeks, and weaker Chinese growth is clouding the international outlook. China surprised investors on August 11 by devaluing the yuan and aligning its exchange-rate policy more with market forces, stoking speculation that the world's second-largest economy may be slowing more than expected.

Manufacturing in the US expanded in August at the slowest pace since May 2013 as a lack of demand from emerging markets, such as China, translated into weaker factory orders. The Institute for Supply Management's index fell to 51.1 from 52.7 in July, a Septeber 1 report showed.

The unemployment rate has dipped to 5.3 per cent, down from a 10 per cent peak in 2009, as companies continue to hire workers. As the Fed weighs when to lift interest rates, policy makers are still looking for signs that inflation will move up toward their 2 per cent goal. Their preferred gauge of prices rose just 0.3 per cent in July from a year earlier.

Forty-eight per cent of 54 economists surveyed August 27-31 by Bloomberg News expect a September increase in the benchmark lending rate, down from 77 per cent in an August 7-12 survey. About one-fourth say the Fed will lift off in December, while 17 per cent said October.


Read more: http://www.smh.com.au/business/markets/us-economy-expanding-across-most-regions-says-fed-20150902-gjdx5w.html#ixzz3kd51iH1G
http://mike-globaleconomy.blogspot.com.au/
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Loki
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b_b
3 Sep 2015, 10:13 AM
Good news. The upward revision may just get the US economy back to its 2.5% growth rate is achieved last year.

Meanwhile, the Atlanta Fed's GDPNow tracker is showing sub 1.5% growth for the 3rd Quarter.
At least the inventory build wasn't as big this year as last year. Every year US corporations run out inventory in Q1 and build inventory in Q2.

And every year Mike jumps up and down like a puppy who has been given a bone when Q2 GDP pops. This year inventory contributed only 0.22%, so it might be good news, but more likely the muddling will continue this year and next.


“Talk sense to a fool and he calls you foolish.” - Euripides
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The Whole Truth
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Economic Collapse Headed for U.S. in 2015

The last thing Wall Street is thinking about is an economic collapse in 2015. After all, the stock markets are at record highs, unemployment is down, and inflation is in check. But the fact of the matter is that these same indicators were also in check before the markets crashed in 1987, 2000, and 2008/09.

Back in 2008/09, everyone on Wall Street, save for Michael Lombardi and Peter Schiff, was absolutely certain that the U.S. economy was the envy of the world and that it was rock solid. But we all know what happened. And if history is any indicator, it will happen again. By the looks of things, the U.S. could experience an economic collapse in 2015 and slip back into a recession. Or worse.

http://www.profitconfidential.com/economic-analysis/economic-collapse-2015/


"Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works." John Stuart Mill
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GloomBoomDoom
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http://www.zerohedge.com/news/2015-09-02/exposing-lie-behind-strong-jobs-recovery-one-chart
MSE
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Loki
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GloomBoomDoom
3 Sep 2015, 08:27 PM
The destruction of the US middle class in one chart.

Bam!


“Talk sense to a fool and he calls you foolish.” - Euripides
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John Frum
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AUD smashed out of the ballpark on a decent NFP jobs print. Fed hike at one of the next 2 meetings all but certain.

Looks like my call of an October capital flight armageddon for the Sydney property market is gathering pace.
"It were not best that we should all think alike; it is difference of opinion that makes horse races." - Mark Twain on why he avoids discussing house prices over at MacroBusiness.
"Buy land, they're not making any more of it." - Georgist Land Tax proponent Mark Twain laughing in his grave at humourless idiots like skamy that continually use this quip to justify housing bubbles.
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