U.S. Economy Grew at 2.4% Annual Rate in 2nd Quarter (LT jobless to 3.65 m

[papau]

http://www.nytimes.com/aponline/business/AP-Economy.html?hp

U.S. Economy Grew at 2.4% Annual Rate in 2nd Quarter

WASHINGTON (AP) -- The U.S. economy, lifted by consumer and business spending, broke out of the doldrums and grew at an annual rate of 2.4 percent in the second quarter of 2003, the strongest showing in nearly a year. The improvement in the gross domestic product in the April to June quarter, reported by the Commerce Department Thursday, came after two straight quarters of lousy economic growth. GDP increased at just a 1.4 percent pace in both the final quarter of 2002 and the first three months of this year. The 2.4 percent growth rate turned in during the second quarter showed more energy than the limp 1.5 percent pace that economists were predicting. .<snip>

...The unemployment rate hit a nine-year high of 6.4 percent in June. It could hover in that range and possibly move higher in the months ahead because job growth probably will not be strong enough to handle an influx of people looking for work amid an improved climate, economists say.<snip>

Especially encouraging in the GDP report was budding signs that the big freeze on business spending is beginning to thaw. Businesses, which cut spending on equipment and software in the first three months of this year, boosted such investment in the second quarter at a sizable 7.5 percent rate. That marked the biggest increase in three years.<snip>


http://www.nytimes.com/reuters/news/news-economy-jobless.html?pagewanted=print&position=

Jobless Claims Drift Down in July 26 Week
WASHINGTON (Reuters) - The number of Americans lodging new jobless claims drifted down unexpectedly to the lowest level since February, the government said on Thursday, in a sign the struggling U.S. job market may be strengthening. The level of new claims, which gives an early reading on the resilience of the job market, edged down by 3,000 in the July 26 week to 388,000 from a revised 391,000 in the prior week, the Labor Department said. Jobless claims were fewer than forecast by analysts polled by Reuters who on average anticipated a 400,000 level. A Labor Department spokesman said the decline is in keeping with seasonal employment trends. Claims typically rise in early July for summer auto plant retooling or school holidays, only to decline later in the month.<snip>

The number of long-term unemployed rose 63,000 to 3.65 million in the week ending July 19, the latest week for which figures are available.<snip>

MY COMMENT: In an unbiased media, I suspect the rise in long term unemployed might be a headline.

In an unbiased media, the GDP headline would be 44% increase in Defense Spending – largest since 1951, moves GDP growth from 1+% area to 2.4% for quarter, as after quarter end long term interest rates for 3 weeks straight rise in response to deficit, threatening future GDP growth rate, and jobs growth.

[Maeve]

1. On the Initial Claims front, the revision might be noted

The original figure for last week was 386,000--revised up to 391,000 so this week the claims are DOWN instead of UP.

Revision is such a handy tool....

[atreides1]

4. Bogus Numbers

But unemployment numbers only take into consideration those that are
still eligible for unemployment checks. As soon the eligibility runs
out those people are no longer counted.

So the numbers are bogus.

[gristy]

6. this is an old argument

They've been measuring unemployment pretty much the same way for a long time (I do seem to remember some kind of "minor" change a while back).

[zoidberg]

14. Not this lie again...

http://www.bls.gov/cps/cps_faq.htm#Ques2
Because unemployment insurance records, which many people think are the source of total unemployment data, relate only to persons who have applied for such benefits, and since it is impractical to actually count every unemployed person each month, the Government conducts a monthly sample survey called the Current Population Survey (CPS) to measure the extent of unemployment in the country. The CPS has been conducted in the United States every month since 1940 when it began as a Work Projects Administration project. It has been expanded and modified several times since then. As explained later, the CPS estimates, beginning in 1994, reflect the results of a major redesign of the survey.

[diplomats]

2. The story I read on yahoo

refers to spending on the war in the first graf. Also, this number will likely be revised later.

[papau]

3. Perhaps I should give up on NYT editing?

But they are the "most liberal" - used only the Reuters and AP wire.

sigh.

[gristy]

5. yes, they did

and I'm glad to see it.

<snip>
Economy Grew at 2.4% Pace in 2Q on Increased Spending
1 hour, 46 minutes ago

By Jennifer Corbett Dooren, Of Dow Jones Newswires

WASHINGTON -- The U.S. economy grew faster than expected in the April-to-June period of this year, boosted by gains in business spending and government spending for the war in Iraq (news - web sites).

MORE

http://story.news.yahoo.com/news?tmpl=story&u=/dowjones/20030731/bs_dowjones/200307310846001111

[Danmack]

17. Damn straight they will revise them later. Whenever the market is tanking.

or the daily politics is taking a dive they come out with great economic news only to revise them later in the dark of the night.

I wonder if anyone has compile a spreadsheet on all the UE and/or economics numbers released by the liars in DC only to be revised upward a month or week later. It would also be nice to have referenced stock market rates and trends at the time of the initial release and of course the after release bounce the market got from the lies of good numbers.

Sorry folks. I wouldn't trust chimpy and crew if they told me the sky was blue without going out and checking it for myself.

Danmack

[mumon]

7. WAGES GREW AT ONLY 0.9%!

Obviously, we're getting poorer.

Oh, they didn't headline that.

[booksenkatz]

8. Consumer spending?

What consumers? And what are they buying? It's all I can do to meet the weekly grocery bill. My position was eliminated in March 2002 and we've been living on my dh's salary, which is good, but to have real food in your house on a regular basis, you need to earn an EXCELLENT salary here in Michigan. A "good" salary just gets you mac and cheese and crap like that.

But I can't complain, when there are so many people who have even less. If my family's hurting on a good salary, what must THEY be going through?

[PROGRESSIVE1]

16. Yes!!!

Defense spending is what has increased the GDP for this Quarter! Remember the consumer confidence index fell by 9 points!!!

[xchrom]

9. the unemployment rate is much higher than

reported -- look at the growth in long term disability for example -- or the number of people who don't even bother to look for work any more.
real unemployment must be somewhere between 12% and 20%. the public can ''feel'' it but they don't know exactly what to make of it.
and until we begin to deal with corporatism -- it ain't gonna get a lot better.

[otohara]

11. 1.7 Million Applied For Disability Last Year

I saw this the other night on News Hour, then there's the people in prison, which is 2 million, and young people, especially African American boys 17-23.

More coverup

[DagmarK]

29. Yes, I saw the NewsHour report too: UE is really about 18%

And they noted that this is higher than it was in 1982. (so, it only took Reagan 2 years to tank the economy and clean out the treasury as well, eh?)

Basically, there are 10 million americans who would work today if they could get a job.

We could start our own country...a nice island in the tropics sounds nice.

**re african american males......the rate is more like 35%!

[PROGRESSIVE1]

18. My Projection is that...

unemployment will stay near 6% for sometime if Wall Street keeps on exported jobs!
The range I would put it in would be 5.6% - 6.3%. When Clinton was in office unemployment fell
to a 35 Year low of 3.8%. Under Kennedy/Johnson it was 3%!!! The problem is that if unemployment drops below 6% to just say 5.9% then Bushco will call it a victory and will be able to spin it into his re-"S"election scheme!!!

[hedda_foil]

10. A simple question ....

HOW, when ever indicator was flat for the entire quarter (except June, I believe ... which wasn't any better than 2.4 if that) could they possibly cook the books enough to come up with 2.4% growth for the quarter?

[Snoopy2]

23. Here's How

From http://www.calpundit.com/
"HOW FAST IS THE ECONOMY GROWING?....The BEA announced today that GDP increased 2.4% in the second quarter. That's better than predicted and generally good news.

However, General Glut points out an interesting anomaly. Here's how the increase was calculated:

First quarter GDP was $9,552 billion
Second quarter GDP was $56.1 billion higher.
That's an increase of .587%.
Multiply by 4 (actually a bit more than 4) to get the annualized rate and it's a 2.36% increase, which gets rounded off to 2.4%


But here's an interesting factoid: the war in Iraq provided a one-time spike in defense spending (and therefore GDP) of about $40 billion. Without the war, GDP would have increased by only $16 billion, an annualized rate of .67%. That's not so hot."

[Beetwasher]

28. Excellent analysis!

Thanks!

[HFishbine]

12. New Unemployment Claims WIll Be Up Next Week

"The level of new claims, which gives an early reading on the resilience of the job market, edged down by 3,000..."

Riiggght. And they are going up by at least 6,450 next week:

"In what North Carolina officials are calling the largest mass job loss in state history, Pillowtex Corp. closed its 16 plants in the United States and Canada on Wednesday andterminated 6,450 workers, more than 4,000 of them in North Carolina."/1]

http://www.news-record.com/news/local/rock/pillowtex31.htm

[lslaux]

13. Thank you Elizabeth Dole!

UNfortunately for the voters of NC, they had a chance to get a Clinton Democrat ( Erskine Bowles ) elected as senator but decided to send another "party line" Repug to the Senate to be a solid vote for Smirk's economic policies. NC also supplies lots of cannon fodder to the IRaqi war. When will they ever learn? I can make these observations because I live in NC but have a good Congressman from my district named David Price.

[PROGRESSIVE1]

15. If that's so then...

North Carolina gets what it deserves!

[MattNC]

20. but...

don't you remember she's gonna bring "JOBS! JOBS! JOBS! More Jobs! Better Jobs!"

I agree it sucks we missed out on Bowles. Hopefully he'll get another shot at running if Edwards doesn't see re-election.

[phillybri]

31. Great point!

She's falling flat on her ASS here!!!

[cosmicdot]

19. how are "independent contractors" handled?

I've wondered.

People who have gone the "consultant" route ... if they have "work", they are obviously "employed" ... when they don't have "work", can they apply for unemployment?

with all the layoffs, downsizing, rightsizing we've seen, I wonder how many people are "independent contractors"

I know when I was duly employed, I issued MUCHO independent contractor agreements

[ferg]

32. I think they don't count

If they're working then they're "part of the labor pool." If they're not working they're not "part of the labor pool", but they're not unemployed.

They don't get unemployment insurance.

[Danmack]

21. GDP Numbers will be revised 2 more times...............

Had to see how the freepers were handling such good news. Since they post whole artcles over there it is a good place to get news you would other wise not get.

Like this. Wall Street Journal

"Spending by the federal government jumped 25.1%, the largest increase since 1967. That jump was attributed to a 44.1% rise in defense spending, the largest since the Korean War, due to the war in Iraq. Federal spending was more than enough to offset a slight decline in spending by state and local governments. The increase in government spending added 1.4 percentage points to GDP growth for the second quarter"

So 1.4% is because of defense spending. Non defense GDP is 1.0%, worse then it was last quarter.

"However, the Commerce Department will revise its GDP estimate two more times and cautioned that Thursday's report is based on incomplete information."

You could see this one coming from a mile away.

If you want to read their thread here it is. Not all of them are breaking out the bells and whistles

http://www.freerepublic.com/focus/f-news/955817/posts

[fishnfla]

22. Roger that

You cannot have growth with record defecits, IMO. If goverment spending is fueling the growth we are robbing peter to pay Paul

[PROGRESSIVE1]

24. Bingo!!!

Bill Clinton prooved that! And for the cost of raising taxes by a mere 4.8% on the Ken Lays of the world and cutting out the waste, Clinton balanced the budget, began to pay down the debt and gave we Americans the best eight years ever!

[fishnfla]

25. EVEN WORSE

If defense spending is churning the economy, that means profits are being made how? Can you say death merchants? The GOP always said war is good for business, added benefit: no rich kids die.

[Zenaholic]

26. "War's good business...

...so give your sons. And I'd rather have my country die for me." -Jefferson Airplane

[Beetwasher]

27. Smoke and Mirrors

Like everything this admin. does. Incredible. There's no productivity in defense spending whatsoever and it doesn't "trickle down" very much. It's like throwing money into a black hole...Sure, GDP goes up, but it's an illusion of growth, where's the beef?

[Snellius]

30. Odd, Bush only mentions tax cuts and not gov't spending

Most of the increase of GDP doesn't seem to have come not from the much ballyhooed "Republican" tax cuts but from the old, tried and true "socialist" technique -- increased government spending.