Non-Political - Officially NOT a recession thread

[Colonel Angus]

 

[myDeaconmyhand]

Yes the market just been humming along due to those massive corporate profits

“Market” - the tweet you are replying to referenced mega corporations which make up a global oligopoly, not the mom’n pop diner down the street

 

[myDeaconmyhand]

All the life wisdom, business degrees and Econ classes in the world still don’t support a narrow economic mindset that fails to differentiate between the problems of small businesses/local economies and the publicly traded corporate oligopolies that control the global economy. Atomizing economics as simply just circumstances acting upon individuals is just a refusal to acknowledge power from the fear of having to hold those in power to account.

 

[PhDeac]

Domestic GDP only shrank 0.6% in the second quarter, not the 0.9% reported last month.

https://www.reuters.com/markets/us/...onomic-contraction-second-quarter-2022-08-25/

The two straight quarterly decreases in GDP meet the standard definition of a technical recession. But in the case of the U.S. economy, the contraction in GDP is misleading, given the large role played by inventories.
Supply chain disruptions have left unfinished products on factory floors or at shipping docks. These products cannot be included in GDP until they go into inventories.
Inventories rose at a $83.9 billion rate last quarter after increasing at a $188.5 billion pace in the first quarter. They subtracted 1.83 percentage points from GDP. Consumer spending grew at a 1.5% pace, revised up from the previously reported 1.0% rate. Shortages and the resulting higher prices have crimped spending.

But guess how conservative outlets are reporting this good news?

This also begs the question, why even bother with reports that will be revised a month later anyway? Just wait.

 

[DeacsATS]

Putting aside whether or not we're in a recession, the adjustment from 0.9% to 0.6% is pretty insignificant and hardly "good news".

It is also 100% looking in the rear view mirror at this point, which is why nobody cares.

Why even bother with the reports that will be revised in a month? Because the more real-time (ish) you can get your hands on economic data, the more helpful it is in figuring out what is going on. The minor adjustments to economic indicators are usually not all that significant.

Another reason why nobody cares is because Powell is going to give a speech tomorrow in Jackson Hole that will be way more impactful on the markets (and future policy) than a minor restatement in GDP for a period that ended ~2 months ago (June 30th).

 

[PhDeac]

Real-time (ish) false data is not that helpful. It means a month worth of policy has been based on misinformation.

 

[DeacsATS]

Real-time (ish) false data is not that helpful. It means a month worth of policy has been based on misinformation.

Sure, but it isn't false data (or misinformation) as much as it is incomplete. At least in this case.

It isn't like they were like, "The domestic economy shrunk by nine tenths of one percent!" and then a month later said, "Oh shit, it really grew two percent! Our bad!"

And neither monetary nor fiscal policy is set based upon an initial read of GDP that may be off by a few basis points... It is just part of the broader mosaic that contributes to decision making.

And in fact, that broader mosaic is why there is debate about a recession to begin with... If you just look at GDP, then yeah, we are in a recession. But that's not helpful in trying to figure out policy going forward. There is a lot of supply chain shit going on. There is a really weird employment backdrop. There is a level of inflation that we haven't seen in decades. There is a housing market that is unlike anything we've seen before. I don't think anybody really knows what the next few months/years will look like.

 

[Colonel Angus]

Domestic GDP only shrank 0.6% in the second quarter, not the 0.9% reported last month.

This is GREAT news but I'm concerned now that even our tribal leaders are mentioning the "R" word

 

[Colonel Angus]

Ten Thousand Million Jobs created since Biden took office!!

Yet another data point supporting the fact the U.S. is definitely NOT in a recession

 

[Biff Tannen]

It is incumbent on every man, woman, and child to have at least 29 new jobs to keep our economy running.

 

[Tobacco Road]

Ten Thousand Million Jobs created since Biden took office!!

Yet another data point supporting the fact the U.S. is definitely NOT in a recession

Are you saying ten thousand million isn’t the fastest job growth in US history?!?

 

[Liquid Karma]

Ten Thousand Million Jobs created since Biden took office!!

Yet another data point supporting the fact the U.S. is definitely NOT in a recession

"Is that a lot?"

 

[DeacsATS]

 

[EatLeadCommie]

Sure, but it isn't false data (or misinformation) as much as it is incomplete. At least in this case.

It isn't like they were like, "The domestic economy shrunk by nine tenths of one percent!" and then a month later said, "Oh shit, it really grew two percent! Our bad!"

And neither monetary nor fiscal policy is set based upon an initial read of GDP that may be off by a few basis points... It is just part of the broader mosaic that contributes to decision making.

And in fact, that broader mosaic is why there is debate about a recession to begin with... If you just look at GDP, then yeah, we are in a recession. But that's not helpful in trying to figure out policy going forward. There is a lot of supply chain shit going on. There is a really weird employment backdrop. There is a level of inflation that we haven't seen in decades. There is a housing market that is unlike anything we've seen before. I don't think anybody really knows what the next few months/years will look like.

The adjustments are par for the course and, as you stated, negative 0.6 compared to negative 0.9 is negligible. GDP actually went down prior to the Nov 2000 election, but the initial report was positive growth. After the election, it was adjusted downward to negative growth. I doubt Ph was moaning about that.

 

[PhDeac]

The adjustments are par for the course and, as you stated, negative 0.6 compared to negative 0.9 is negligible. GDP actually went down prior to the Nov 2000 election, but the initial report was positive growth. After the election, it was adjusted downward to negative growth. I doubt Ph was moaning about that.

Why wouldn’t I moan about that? It’s the same problem of acting on inaccurate information.

 

[DeacsATS]

FedEx CEO says he expects the economy to enter a ‘worldwide recession’

FDX stock is getting monkey-hammered this morning and the rest of the market will likely be pretty soft on this.

The chief executive, who assumed the position earlier this year, said that weakening global shipment volumes drove FedEx’s disappointing results. While the company anticipated demand to increase after factories shuttered in China due to Covid opened back up, it actually fell, he said.

“Week over week over week, that came down,” Subramaniam said.

The chief executive also said that the loss in volume is wide-reaching, and that the company has seen weekly declines since around its investor day in June.

“We’re seeing that volume decline in every segment around the world, and so you know, we’ve just started our second quarter,” he said. “The weekly numbers are not looking so good, so we just assume at this point that the economic conditions are not really good.”

“We are a reflection of everybody else’s business, especially the high-value economy in the world,” he later added.

 

[Liquid Karma]

I wonder if people realize how hugely important avoiding that rail strike was? It sounds like the ILWU (longshoremen) were considering striking at the same time for maximum effect.

It would have taken a few weeks for us to feel the pain, but damn that would have sucked all around.

 

[DeacsATS]

I wonder if people realize how hugely important avoiding that rail strike was? It sounds like the ILWU (longshoremen) were considering striking at the same time for maximum effect.

It would have taken a few weeks for us to feel the pain, but damn that would have sucked all around.

Absolutely. Would have been the straw that broke the camel's back for this economy, IMO.

 

[Colonel Angus]

FedEx CEO says he expects the economy to enter a ‘worldwide recession’

Obviously the FedEx CEO does not understand that Q2 GDP only shrank 0.6% instead of the reported 0.9%.

Will someone do him a solid and forward him the Reuters article posted by PhDeac?