Does the improved American economy doom Obama's chances?

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Originally posted by European intellectual elite consensus during the years 2002, 2003, 2004, 2005, 2006, 2007 and 2008
The thing is that the [US economic] numbers actually are pointing to an economy on the verge of a recession.

You're an idiot, Colon.

As I said, there was a big drop in July and considering the absence of supporting factors (rising unemployment, no more tax rebates...) there's a good possibility August and September won't make up for it.

Yeah yeah, there still isn't any sort of concrete proof for recession in the US, but the VERY LATEST figures are actually indicating an upcoming recession so let's talk about how bad the US economy is doing. Meanwhile, let's not get angry at our own politicians because we're not paying attention to how our Eurozone economies are doing.

We'll see.

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Originally posted by Imran Siddiqui

a recession is by definition two consecutive quarters of negative GDP growth

That would also be somewhat of an outdated definition to most economists.

http://en.wikipedia.org/wiki/Recession

A recession is a contraction phase of the business cycle. In the USA, the National Bureau of Economic Research (NBER) defines it more broadly as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales."[1] Newspapers often quote the rule of thumb that a recession occurs when real gross domestic product (GDP) growth is negative for two or more consecutive quarters. However, not only is this a flawed measure that fails to register several official (NBER defined) US recessions, the quotation has been taken out of context from a 1974 New York Times article that listed a number of rules of thumb, the rest of which have been ignored [2].

Great, so let's re-define words so they suit our political ambitions.

What follows is that politicians can proclaim recession every single year they are in opposition. Yet another victory for truthiness

If you want to use a term for "a significant (but not defined, so the user can himself decide when it is "significant" decline in economic activity spread across economy, lasting more than a few (how many?) months, normally (but not always, meaning none of these factors actually has to matter the word usage) visible in real GDP, real income, employment, industrial production, and wholesale-retail sales", invent your own word.

[Darius871]

Originally posted by VJ
Great, so let's re-define words so they suit our political ambitions.

What follows is that politicians can proclaim recession every single year they are in opposition. Yet another victory for truthiness

If you want to use a term for "a significant (but not defined, so the user can himself decide when it is "significant" decline in economic activity spread across economy, lasting more than a few (how many?) months, normally (but not always, meaning none of these factors actually has to matter the word usage) visible in real GDP, real income, employment, industrial production, and wholesale-retail sales", invent your own word.

QFGDMFTTRUTFATREIB!

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contents of this post edited in to my 1st post on the thread

[Zkribbler]

Re: Does the improved American economy doom Obama's chances?

Originally posted by Naked Gents Rut
The Commerce Department recently revised the second quarter U.S. GDP growth numbers upwards to 3.3%.
...
Does the robust U.S. GDP growth in the second quarter of 2008 mean Obama is doomed in November?

Your post misses a crucial fact.

Even if America is doing better, Americans aren't. Increases in GDP go to the top 1%. The bottom 99% will at best stagnate but will more probably do worse.

[Colonâ„¢]

Well, I guess I was absolutely spot-on.

U.S. in Midst of Recession as Credit, Spending Shrink (Update1)

By Shobhana Chandra and Andy Burt
Enlarge Image/Details

Oct. 9 (Bloomberg) -- By almost all accounts, the U.S. is now in a recession, according to economists surveyed by Bloomberg News.

The economy will shrink at a 0.2 percent annual pace in the third quarter and 0.8 percent in the last three months of 2008, according to the median estimate of 52 economists surveyed Oct. 3 to Oct. 8. The contraction would follow declines in the four monthly gauges the National Bureau of Economic Research also uses to determine recessions: payrolls, production, income and sales.

Growth will be undone by the demise of the longest expansion in consumer spending on record as Americans retrench in the face of the worst financial meltdown since the Great Depression and mounting job losses. Economists, in a follow-up survey yesterday, projected the Federal Reserve will cut interest rates again after the unprecedented coordinated action taken by central banks.

``They're responding rapidly to a rapidly changing situation,'' said Ken Goldstein, an economist at the Conference Board. ``It's causing central banks to make it up on the fly to keep things from getting worse. As a forecaster, it's become very difficult'' to gauge the economic fallout, he said.

Reports today showed inventories are piling up as demand slumps and the number of people collecting jobless benefits rose to a five-year high. Stockpiles at U.S. wholesalers climbed 0.8 percent in August, twice as much as forecast, as sales dropped by the most in more than a year, according to figures from the Commerce Department.

Jobless Roll

There were 3.67 million Americans collecting unemployment insurance in the week ended Sept. 27, the most since June 2003, the Labor Department reported.

Declining output would open the way for the NBER, the arbiter of U.S. business cycles, to declare a recession. Robert Hall, the Stanford University economist who leads the NBER panel that makes the call, this week said the group was in ``waiting mode'' as gross domestic product had yet to shrink significantly.

The market turmoil will spark the longest and deepest recession in at least three decades, Harvard University's Martin Feldstein, another member of the group, said yesterday in an interview on Bloomberg Television.

The Cambridge, Massachusetts-based bureau defines a recession as a ``significant'' decrease in activity over a sustained period of time. The group does not follow the common rule of thumb of back-to-back quarterly decreases in GDP.

Estimates Slashed

Economists slashed growth forecasts by more than a percentage point for the third and fourth quarters of this year and for the first three months of 2009. The remaining two periods in the forecast horizon, through September 2009, were also cut.

Odds that the U.S. is, or will soon be, in a recession were 90 percent, up from 51 percent in the September survey.

Consumer spending, the biggest part of the economy, will drop at a 0.9 percent annual pace this quarter after posting a 2 percent decline from July to September, the survey median showed. Purchases have been growing since 1992, the longest expansion in the post World War II era.

``The labor market is taking it on the chin, wealth is getting decimated, and when you put that together it is a pretty ugly mix for the consumer,'' said Michael Feroli, an economist at JPMorgan Chase & Co. in New York. ``It'll be a pretty deep and somewhat long recession.''

The real-estate slump, which triggered the meltdown in subprime mortgages, is still causing home values to plummet. As a result, Americans can borrow less against home equity.

Unemployment Rate

The jobless rate, already at a five-year high of 6.1 percent, will surge to 6.8 percent by mid-2009, according to the survey median. The jump in unemployment would be more severe than the 6.3 percent peak reached in 2003 in the aftermath of the 2001 recession.

The Fed, which slashed the benchmark rate by half a percentage point to 1.5 percent yesterday, will follow with a quarter-point reduction by year-end and another by March, bringing the rate down to 1 percent, according to the survey median. Prior to the coordinated action yesterday, economists projected the rate would remain at 1.5 percent through the third quarter of 2009.

``There will be pressure on the Fed to do more, and probably on the Treasury as well,'' said James O'Sullivan, a senior economist at UBS Securities LLC in Stamford, Connecticut. ``For now, the economy is still weakening. It's hard to find things that are getting better.''

Less Profit

Bank of America Corp. is among companies bracing for tougher times. The Charlotte, North Carolina-based company chopped its dividend in half and raised $10 billion in a share offering to shore up capital after it reported a 68 percent plunge in third- quarter profit.

``The recession is going to be a little deeper than we thought,'' Chief Executive Officer Kenneth Lewis said on a conference call this week. ``It's going to take some more time and some more pain.''

Slower growth and lower fuel costs will help check inflation. Consumer prices will rise 3.8 percent this year and moderate to a 1.9 percent gain by late 2009, according to the median.

``We're in dire straits here in terms of the financial and credit markets and the real economy,'' said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York. ``The consumer is up the creek without a paddle. We just don't see the economy emerging from the recession until 2010 at the earliest.''

To contact the reporters for this story: Shobhana Chandra in Washington at schandra1@bloomberg.net; Andy Burt in Washington at aburt1@bloomberg.net
Last Updated: October 9, 2008 11:07 EDT

[Zkribbler]

Re: Does the improved American economy doom Obama's chances?

Originally posted by Naked Gents Rut
The Commerce Department recently revised the second quarter U.S. GDP growth numbers upwards to 3.3%.

Does this mean we get our $700 billion back?

[Colonâ„¢]

It revised downwards again to 2.8% in the final estimate.

[Dinner]

Originally posted by VJ

You're an idiot, Colon.


Yeah yeah, there still isn't any sort of concrete proof for recession in the US, but the VERY LATEST figures are actually indicating an upcoming recession so let's talk about how bad the US economy is doing. Meanwhile, let's not get angry at our own politicians because we're not paying attention to how our Eurozone economies are doing.

We'll see.

There has been some proof. Like the continuous net monthly job loses since Nov 2007.

[Kidlicious]

Re: Does the improved American economy doom Obama's chances?

No it doesn't. Is that what they are saying at CG?

[Aeson]

Originally posted by Colonâ„¢
It revised downwards again to 2.8% in the final estimate.

Still above 2.6%. Congratulations McCain?

[Colonâ„¢]

There will be more revisions.

[Fake Boris]

I'm truly waiting for VJ.

[Zkribbler]

Increase growth is a chimeral number for most Americans. The income generated by it goes only to the upper class, and none trickles down to the middle class or below.

[GePap]

No. As for Americans not voting based on facts, I agree, but the fact that will matter to most households is that they keep seeing their assets decline and they keep seeing their neighbors loosing their jobs, so most Americans will certainly not think the economy is doing well.