got bit by reality check over the last few days.
I listened to the trumpets tell me how I did not understand GDP and how the 4th qtr mis was not the way I thought it would be. huge upward revisions were on the way.
reality of the unit price productivity report followed up by the import/export trade imbalance tells anybody who understands gdp in the least. how wrong they were.
at this point GDP for the 4th qtr is on pace for sub 2.0 number
Have you done a comparison/correlation between GDP and trade deficits? I'm betting not.
Let's for now, set aside the fact that the overall GDP for 2018 largely eclipsed the GDP of the previous 8-10 years.
To help you out a little... In the world economy, the US is a net consumer nation. As our economy grows, it's not at all unusual to expect, and see an increase in the trade deficit. As the chart in the above attachment shows, some of our highest GDPs have been accompanied by some of our highest trade deficits.
The reduction in corporate tax will likely modify this relationship in our favor, to some extent, but as it took effect Jan 1, 2018, it would not have much effect on Q4:17.
"reality of the unit price productivity report followed up by the import/export trade imbalance tells anybody who understands gdp in the least. how wrong they were."
So, I'm to understand that you actually do understand gdp. If we are talking about what we produce minus what we import, and we have a very active Christmas season, what do you think happens to GDP in that quarter?
But, that wasn't the question that made you disappear for awhile, was it? A quote from your post (AS IT READS NOW!):
"Its good that they are predicting over 4% growth but then again they predicted that last qtr and that is what this whole post started over. Here is a little wake up call we did not make it to 4% growth not even close.
we keep hearing of these great things to come and yet reality keeps punching the working class in the mouth."
But, frey, THIS IS WHY I SOMETIMES DO A COPY/PASTE of what I am responding to. I've found that NOT EVERYONE IS HONEST! This was my copy/paste FROM YOUR ORIGINAL POST:
"Here is a little wake up call we did not make it to 4% growth not even close and that is with Inflation adding 1.8% to the gdp number a full .8% more than the last 4 years if you take that away from the posted number than what do you end up with??"
I then asked "what do you mean when you say "inflation adding 1.8% to the gdp number"?"
Frey, it appears that you have proven what many of us here have been saying. You have proven to be a typical modern day Democrat. Truth is only a consideration - when it is convenient.
A man is only as good as his word.
I deleted the entire phrase because after you pointed it out to me and I reread what I posted it did not convey what I was trying to say and I could not think of the phrase I needed to make it read the way I was trying to get it to. I figured that the verbiage I needed would come out in some of the revisions reports.
The Verbiage I should have used instead of inflation is "Unit price productivity" which is the labor cost per unit of production or unit of gdp Provided I'm using the correct verbiage now. Unit price productivity gages the labor inflation when labor cost rise faster than the underling production rate it will be a downward drag on GDP as is my understanding and I think we will see a down ward revision of gdp by 1.0 in later revisions.
Sorry you got so bent out of shape by my fopa and edit will be sure to check in with you next time I have these issues.
BTW -- at this point there is absolutely nothing left of the Republican party that makes it something I any longer want to be a part of. they have overtaken the dems in desire to spend money. only thing is they also have a need to cut taxes for their rich donors. The dems are the party of Tax and spend, The Republicans are the Party of Borrow and spend. and let the next generations pay our bill. It is an easy way to get reelected
You really do try. I'll give you that.
Productivity is a measure of the relationship of "input" to "output". Input is capital and labor while output is finished product.
If Input (labor and cost) remains stable and efficiency is improved, output (product/productivity) goes up. This can have a favorable impact on GDP for various reasons.
If Input increases and output remains stable, the effect on GDP is questionable. It can be from a drop in efficiency, where the same amount of labor is producing less, which will likely have a negative impact on GDP. It can also be from an increase in labor costs, where wages are increasing. There are other factors to consider to determine the impact on GDP but higher wages can certainly contribute to an increase in GDP. We are actually starting to see wage pressure, for the 1st time in about 10 years. This is a large reason for the correction we are currently seeing in equities. Wage pressure is one of the most critical factors the fed uses in determining monetary policy and Wall Street is speculating that the Fed will take a far more "hawkish" approach.
A revision of +/-1 percent , particularly at these levels is unprecedented, so your prediction of a 1% downward revision, if correct, will make history. Shall I count on you to acknowledge the err of your thinking should it turn out to be incorrect?
As a suggestion, should you want to "revise" a statement you have made, editing the statement at a later date can be viewed as dishonest. Better to acknowledge the revision in a follow up post. Something like "What I meant to say above was....."
Finally, I have no idea what a "fopa" is. Is it one of those silly hats some guys wear at conventions? Is it the hat from which you pulled your GDP prediction?
Thanks, Tim. You have a much nicer way of explaining how a person should not be dishonest than I do. (g)
But, putting current GDP in perspective, isn't anything over 1.5% beating Obama's eight year record?
And, again, I have to admit that you were right about the tax plan. This is not unlike when Reagan came in, is it? Carter was talking about the "malaise" - and in came Ronald Reagan - eager to get the country rolling again. Here, we get Donald Trump replacing a very business unfriendly Obama. I've seen this on jobs, where a new boss comes on the scene replacing one who is not respected, and the crew essentially says - Let's get to work! I've been amazed, over the years I spent in arctic Alaska, how much difference one person can make on a crew's productivity.
I'm absolutely convinced that - there was no one else running who could have done this.
The flip side of this, however, is that - if Mueller does find something in Trump's past that does initiate impeachment proceedings followed by his resignation, we had better be ready for a rough road. There is a passage in the OT that describes the cycle perfectly. Fascinating that they knew all about this even then.
I remain skeptical that Mueller will find anything of significance. Collusion is not illegal or impeachable and there doesn't seem to be any "there" there anyway.
Money laundering is another issue altogether, but again, I remain skeptical.
Or maybe there are other developments of which I am not aware. It's been running a long time. Are we seeing a stubborn witch hunt or are we watching the peeling of an onion?
But you are right. Economically, we're on the right track. And Trump remains the worst possible choice for president, except for all the others.
I acknowledge that my edit process was flawed - in my defense i could not come up with the phrase that I was looking for "unit price Productivity" which in reality is probably not the true phase I am looking for but I do think it conveyed what I was hoping for. Some posters seemed to obsessing of that one portion of the post and with out the terminology to correct my self I decided to take it out of the post rather than allow the hole post to become about something I could not at the time explain, because I used poor terminology.
as far as GDP's to use the hole of the eight years of Obamas two terms is as misleading and flawed as any statement can be, the mess he inherited caused a huge distortion in his full term average add to it the sequester ( which was needed for budgetary reasons that seem to now not matter to the republican majority ) also helping to take down the gdp at those times.
I also will wait for your acknowledgement of your mistake on GDP if the Revisions to the original number are not in a upward direction as your post indicated that if I had any idea of how GDP work that I would understand they would be.
so I guess we shall wait and see who gets to acknowledge their error in thinking