What Ever Happened to the Misery Index?
Remember the 1960s? The 1970s? Back then, inflation surged from one peak to another but failed to deliver the low unemployment rates promised by the Phillips curve. In fit of frustration, economist Arthur Okun invented what he called the misery index—the sum of the inflation and unemployment rates. As the following chart shows, those were ... Read more
When Will the Economy Recover? What does “Economic Recovery” Mean, Anyway? Public and Professional Views
According to the latest public opinion poll from CNNMoney, 61 percent of Americans think it will take three more years for the U.S. economy to recover fully from the Great Recession. Only 3 percent think that it has already recovered, while 16 percent think it will never recover. And that was before last week’s news ... Read more
Total US GDP Grows 3.2 Percent in Q4. That’s Nice, but Why do We Pay So Little Attention to Per Capita Measures?
According to today’s advance estimate from the Bureau of Economic Analysis, U.S. real GDP expanded at an annual rate of 3.2 percent in the fourth quarter of 2013. That brought GDP growth for the entire year to 2.74 percent, nearly equaling the 2.77 percent of 2010, which was the strongest since the recovery began. As ... Read more
Latest Economic Growth Data Give Cheer to Market Monetarists, or, What is the NGDP Gap and Why do we Care?
The headlines for the latest report on U.S. economic growth mostly focused on the revised 4.1 percent growth rate for real GDP. As the following chart shows, that made it the best quarter in two years, and only the second quarter since the recovery began in which growth hit the 4 percent mark or better. ... Read more
US Economic Growth Rises to 2.8 Percent in Q3; GDP-Based Inflation Indicators Remain Below Target
Today’s advance estimate from the Bureau of Economic Analysis showed U.S. real GDP growing at a 2.8 percent annual rate in the third quarter of 2013, the fastest growth reported since early 2012. The estimate, which reflects economic activity from June through September, was not directly affected by October’s government shutdown, although the data release ... Read more
Jobless Claims Surge on the Blowback From The Backlog
Talk about a reversal of fortunes! Last week’s filings for new jobless claims soared 66,000 to a seasonally adjusted 374,000, which is the highest weekly total since March, according to a division of the Labor Department that’s still publishing economic reports. A substantial slice of the increase is reportedly due to playing catch-up with the data in ... Read more
US Corporate Profits at All-Time High as GDP Growth Holds at 2.5 Percent
The Bureau of Economic Analysis released new data today showing that corporate profits reached an all-time nominal high in the second quarter of 2013. Profits before tax rose to 12.53 percent of GDP from 12.22 percent in the previous quarter, as the following chart shows. That was just fractionally short of the all-time high of ... Read more
US GDP Grows 1.7 Percent in Q2, Beating Expectations, but Earlier Quarters Revised Down to a Crawl
The Bureau of Economic Analysis today released its much anticipated advance estimate of second quarter GDP growth, along with rebenchmarked data for earlier quarters. Q2 growth was reported as 1.7 percent, hardly scintillating, but better than some analysts had expected. However, growth for Q1 was revised down from 1.8 percent to just 1.1 percent, and ... Read more
Follow up to yesterday’s post: Euro area consumption and Investment in Q2 2013
Yesterday I illustrated the unsustainable accounting growth engine of imports occurring in the euro area (EA). Today I’ll present more of a forward looking analysis on private domestic demand within the euro area: consumption and investment. If current levels of real retail sales hold at the euro area level, then the contributions to growth in ... Read more
Chart for the day: Growing on Imports
Or should I say barely contracting on imports. In the traditional sense, growth in imports does not make a whole lot of sense. Normal economies import and export things, such that statistical agencies subtract the dollar amount of things that are made in other economies but consumed domestically (imports) out of their tally of spending on ... Read more