Quarterly GDP Numbers Come Out Friday: 4.2% or 5.2%? (state, wars, best)

[thriftylefty]

When the number floats back down to normal next quarter it can be characterized as doom and gloom. right before the election.

[PCALMike]

Originally Posted by ColoradoOnMyMind

Wage growth is coming I believe. With unemployment levels as low as they are, tax and regulatory burdens on companies drastically lowered, an economy that is rock solid, we will see rising wages soon, companies will be forced to pay more to get the workers and will be able to with increased profits. We already saw annual bonuses from the tax cut plan.

Its been said for 20 years and wages have been flat for the typical worker in all that time. This is far more serious than some small tax cut or "regulatory burdens on companies" being too much. Companies are doing fine, thats not the problem. They've been doing just fine for decades. The workers have not. Labor unions have been crushed and the corporate elites have such an immense advantage in the power-relations with the worker that the typical worker simply does not stand a chance. Thats why wages have been flat for 20 years, in good economic years and in bad. Soon, people will stop believing the lies that all workers have to do is just wait, wage growth is coming.

[Mircea]

Originally Posted by PCALMike

Its been said for 20 years and wages have been flat for the typical worker in all that time.

There's no proof of that. Since 2006 when BLS started compiling data, wages have increased 34.6% from $20.04/hour to $26.98/hour and CPI-W has only increased 26.7% over the same period.

That's a net increase in real wages.

Wages are not based on GDP, or Productivity, or Inflation, except in the case of Monetary Inflation, which causes the wages of every single worker from minimum wage workers to CEOs to get that exact same wage increases.

19+% of that 26.7% "Inflation" increase is due to Demand-pull Inflation.

The sole purpose of Demand-pull Inflation is to prevent the depletion, overuse or over-consumption of resources, goods and services.

Increasing wages to match the rate of Demand-pull Inflation is an incredibly stupid thing to do, because it only accelerates the depletion, overuse or over-consumption of resources, goods and services, which drives up prices even higher.

This is a game you can't possibly win. Not ever.

The sooner people accept that reality, the easier things will be.

The only way to stop Demand-pull Inflation is to stop consuming, or increase Supply to match or exceed Demand.

Increasing Supply is not always an option, and even when it is an option, the rate of increase of Supply is still less than the rate of increase for Demand, so prices still rise, albeit more slowly. Also, in some instances, the cost to increase Supply is often greater than the profits that could be derived, so prices have to rise even higher to reach a point where the cost to increase Supply is break-even, and then prices have to rise still higher to produce profits.

[Mircea]

For those who didn't read the technical notes:


The acceleration in real GDP growth in the second quarter reflected accelerations in consumer spending
and exports, and a deceleration in imports. These movements were partly offset by a downturn in
private inventory investment and a deceleration in nonresidential fixed investment.

• The acceleration in consumer spending reflected an upturn in goods and an acceleration in services. Within goods, the leading contributor to the upturn was motor vehicles and parts, reflecting an upturn in purchases of new motor vehicles. Within services, accelerations in spending on health care, on housing and utilities, and on food services and accommodations were the leading contributors



Healthcare and vehicles are not something people purchase every day.

[James Bond 007]

Originally Posted by leanmom

It is encouraging but are you not concerned with some of the analysis provided that the surge in GDP can be attributed to the surge in overseas buying initiated by the threat of rising prices?

Somewhat related to that, here's an interesting analysis on the GDP number:

They Changed GDP, At Least

As most people expected outside of politics, quarterly growth in Q2 was boosted by a single item. Coming in at 4.1%, or, more appropriately, 3.98008% continuously compounded annual, this was by far the best number since Q3 2014.

It was boosted by a noticeably outsized contribution from the export sector.

We’ve been hearing about trade wars and restrictions on goods all year. In Q2, US exporters took their turn trying to get ahead of them. Net Exports, a category which includes imports subtract against exports, is usually a drag on GDP since the United States almost always brings in more goods than it ships out.