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Title: U.S. Economy Gained in Third Quarter on Consumer Spending
Source:
Bloomberg
URL Source: http://www.bloomberg.com/news/2010- ... rter-on-consumer-spending.html
Published: Oct 29, 2010
Author: Bloomberg
Post Date: 2010-10-29 09:29:46 by go65
Keywords: None
Views: 265
Comments: 11
The U.S. economy grew at a 2 percent annual rate in the third quarter as consumer spending climbed the most in almost four years, a sign the expansion is developing staying power. The increase in gross domestic product matched the median forecast of economists surveyed by Bloomberg News and followed a 1.7 percent gain the prior three months, Commerce Department figures showed today in Washington. Household purchases, about 70 percent of the economy, rose at a 2.6 percent pace, the best quarter of the recovery that began in June 2009. The figures, the last economy-wide gauge before voters head to the polls on Nov. 2, show growth remains short of what’s needed to cut a jobless rate stuck near 10 percent. The report also indicated inflation cooled as retailers like Wal-Mart Stores Inc. cut prices, one reason why Federal Reserve policy makers next week may pump more money into the world’s largest economy. “Consumer spending looks considerably better,” Jim O’Sullivan, chief economist at MF Global Ltd. in New York, said before the report. At the same time, “it’s pretty clear the Fed will do more as they’re trying to get above-trend growth to reduce the unemployment rate.” Projections of 83 economists in the survey ranged from 0.5 percent to 3.6 percent. The GDP estimate is the first of three for the quarter, with revisions in November and December when more information becomes available. More Spending The gain in consumer spending, the biggest since the end of 2006, compared with a 2.5 percent median forecast in the Bloomberg survey and followed a 2.2 percent increase the prior quarter. Purchases added 1.8 percentage points to growth. Stock-market gains and reduced debt may be allowing consumers to increase spending, which bodes well for the holiday season. The National Retail Federation has forecast November- December sales will rise 2.3 percent from a year ago, making it the best holiday season in four years. Wal-Mart, the world’s largest retailer, Target Corp., Amazon.com Inc. and EBay Inc. are among merchants that will benefit as holiday shoppers seek bargains, according to results of a survey issued this month by Consumer Edge Research in Stamford, Connecticut. Target, the second-biggest discount retailer, said this month it would lower prices on more than 1,000 toys to attract shoppers. Its larger rival responded with its own discounts, advertising saving on brands such as Barbie and Nerf toys. Taking Vacations Miami-based Royal Caribbean Cruises Ltd., the world’s second-largest cruise operator, raised its 2010 profit forecast and predicted record earnings next year. Passenger bookings are rebounding since Chief Executive Officer Richard Fain slashed ticket prices and costs last year. Demand is now “steady and solid,” Fain said in an Oct. 26 statement. “The economy is still tough, but even facing such headwinds, our outlook is remarkably encouraging.” Fed Chairman Ben S. Bernanke said on Aug. 27 that the central bank “will do all that it can” to sustain the economic recovery. Investors are anticipating policy makers will announce another round of asset purchases after buying $1.7 trillion in debt from December 2008 to March. The Fed meets Nov. 2-3 to consider steps to boost an economy growing too slowly and prevent inflation, which remains below its longer-term projections, from cooling even more. Growth in the 2.5 percent to 2.8 percent range is consistent with keeping the jobless rate stable, according to policy makers’ latest forecasts. Less Inflation The Fed’s preferred price gauge, which is tied to consumer spending and strips out food and energy costs, climbed at a 0.8 percent annual pace, less than the median forecast and down from a 1 percent increase the prior quarter. The central bank’s longer term projection is a range of 1.7 percent to 2 percent. The election next week will determine which party controls Congress. There is no clear consensus on which party deserves more blame for the economy’s problems, or how best to fix them, according to a Bloomberg National Poll conducted Oct. 24-26. It showed Republicans are poised to retake the U.S. House without a mandate from voters to carry out their policies. In addition to consumer spending, third-quarter growth got a lift from a pickup in inventories and gains in business investment on equipment and software and federal government outlays. The economy may not be able to count on the latter much longer as about 70 percent of President Barack Obama’s estimated $787 billion stimulus has been spent, according to a September White House report. Auto Production Automakers were another bright spot last quarter. Vehicle production climbed at a 21 percent annual rate, adding 0.4 percentage point to growth. Ford Motor Co., the second-largest U.S. automaker, plans to invest $850 million and add 1,200 jobs in Michigan by 2013 as sales rebound, the company said Oct. 25. It will add 900 hourly positions in its factories and 300 salaried jobs at its engineering and manufacturing operations, it said. A pickup in auto demand may keep helping manufacturers. Vehicle sales are running at a 12 million annual rate in October, Mark Fields, Ford’s president of the Americas, said this month. The rate would be the highest since the government’s “cash for clunkers” incentive boosted demand in August 2009. “We continue to see good, steady improvement,” Fields said on Oct. 25 at an event in Sterling Heights, Michigan. A 29 percent plunge in home building, the biggest since the first quarter of 2009, and a widening trade gap hindered the world’s largest economy over the past three months, today’s report showed. Excluding trade and inventories, a measure of underlying demand, the economy would have grown at a 2.5 percent annual rate after expanding at a 4.3 percent pace the previous three months.
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#1. To: go65 (#0)
Liars. Every GDP has been revised downward. Just like the past 27 unemployment claims have been revised upward: # # Jobless Claims Drop 12K 20 posts - 18 authors - Last post: 23 hours ago New U.S. claims for unemployment benefits unexpectedly fell last week, ... The government revised the prior week's figure up to 455000. .... This morning's release makes it 26 out of the past 27 weeks that the DOL has ... www.freerepublic.com/focus/news/2616231/posts?page=1
And note not one word on this? Anywhere? " Millions march in France against pension cuts By Kumaran Ira and Alex Lantier 29 October 2010 Millions of workers and students took to the streets across France Thursday to protest final approval by the National Assembly of President Nicolas Sarkozy’s pension “reform” bill. The French economy was still crippled by gasoline shortages due to ongoing refinery and port strikes. http://www.wsws.org/articles/2010/oct2010/fran-o29.shtml Message from Top 50 000 to Bottom 99%: "Eat shit and die." 8D
Correct.
Obama's first all-by-his-lonesome budget, btw, calls for a $1.17 trillion deficit.
Correct. Thank you, BE. What a pleasure to converse with you. 8D From Last Nite: theautomaticearth.blogspot.com/ " I first contacted Doug last week, and I think that was the first time he saw my versions of his own graphs. He called them "fascinating" and asked me for the post you're reading. The reason I wrote to him, as well as to Rick Davis at CMI, was a question Doug fielded from a dshort.com reader, who wondered how it was possible that the US Census Bureau reported a +7.3% y-o-y rise in retail sales in September '10, while the CMI 91-day index is tumbling. Earlier, I had seen a Gallup report on consumer spending that showed a drop of -10.6% over that same period.
But before they come in, the Lame Duck's will be hunted harder than Mallards in E Arkansas. 8D Expect Disaster News Dump Thanksgiving Eve, with Neg Growth #'s coming in between Xmas/New Years. BOO
UMichigan Consumer Confidence Misses, Comes At 67.7 On Expectations Of 68.2, New 2010 Low, As Expectations Plummet Submitted by Tyler Durden on 10/29/2010 09:01 -0500 * Consumer Confidence So Consumer Spending did the Trick on the 2% GDP, but Consumers aren't confident. Oh Yeah, that makes sense. 8D
I doubt you'll see much more than a continuing resolution and a one year extension of the Bush tax cuts. The big moment will come when the government hits its debt ceiling next year. If the GOP doesn't approve an increase, they will have to come up with over a trillion dollars in immediate budget cuts.
The big moment will come when the government hits its debt ceiling next year. If the GOP doesn't approve an increase, they will have to come up with over a trillion dollars in immediate budget cuts. To respectfully disagree, the Debt Ceiling was an artificial construct to begin with. One that can be put off forever. The Bond market, on the other hand, will be the Slave Market. The Fed and the Primary Dealers are all that's left. http://avidtrader.blogspot.com/2010/10/treason.html by Larry Levin There was a very interesting piece on ZeroHedge recently regarding the Fed's latest QE surprise. Like a mother asking how many Halloween treats a child would eat, if the kids could ask for any amount, the Federal Reserve has asked the Primary Dealers the same. In the mother/child/Halloween candy scenario, the child makes the decision. In much the same way, the Federal Reserve is asking the Primary Dealers (PD) to make the decision. Moreover, since several of the PD banks are foreign banks and would be making US monetary policy; some are wondering if this is treasonous?" dmitry orlov: " The second community is already accustomed to hardship and, not having quite so far to fall, can take the transition to mayhem, destitution and squalor in stride. The prevalence of illegal activity prior to collapse smooths the transition to a black market economy. Already resistant to the idea of relying on police protection, the residents are relieved when the police disappear from the streets, and a great deal of unofficial and illegal activity that previously had to be conducted in secret bursts out into the open." Waiting Time is over now. This is the Still Moment. The time when something gives way, and the Collective knows there's no going back, but what is in front. November. Starting now.
zerohedge: "Simply said, the realization that austerity has failed, following recent endless strikes out of France, is becoming ever more widespread. Basically, the only two alternatives proposed by Keynesian economics: excess spending and thrift, are now in complete failure mode, once again confirming that the sole economic theory used by the world over the past century has been nothing but a lie, providing no viable alternatives in times of real stress. Next up: the realization that fiat money is a broken system. Luckily, Bill Gross is ahead of the pack on that one: "Perhaps, as a vocal contingent suggests, our paper-based foundation of wealth deserves to be buried, making a fresh start from admittedly lower levels." When that last, most obstinate and intellectually challenged Nobel-prize winning shaman of Keynesianism, Paul Krugman finally espouses this view, that will mark the end of the Fed, and will return gold to its rightful place. Of course, for that to happen, Krugman will need to populate his little pet Op-Ed column: "The Worst Economist In The World" with daily quotations of his own endless drivel."
Nope. The GOP will FORCE Owe-bama's hand on this. He'll either sign off on it, and keep alive his dim chance for re election in 2012, or he'll veto it, and ensure he gets fired...and probably face a primary challenge from Hillary Clinton and/or Evan Bayh.
Obama's first all-by-his-lonesome budget, btw, calls for a $1.17 trillion deficit.
#2. To: All (#1)
#3. To: mcgowanjm (#1)
Every GDP has been revised downward.
#4. To: All (#0)
(Edited)
On January 3, 2011 the GOP assumes responsibility for deficit spending.
#5. To: Badeye (#3)
Every GDP has been revised downward.
#6. To: go65 (#4)
On January 3, 2011 the GOP assumes responsibility for deficit spending.
#7. To: All (#6)
#8. To: mcgowanjm (#6)
But before they come in, the Lame Duck's will be hunted harder than Mallards in E Arkansas.
On January 3, 2011 the GOP assumes responsibility for deficit spending.
#9. To: go65 (#8)
I doubt you'll see much more than a continuing resolution and a one year extension of the Bush tax cuts.
#10. To: All (#9)
#11. To: go65 (#8)
I doubt you'll see much more than a continuing resolution and a one year extension of the Bush tax cuts.
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