GDP in 3rd quarter rises to 3.5%; Update: Initial jobless claims steady
posted at 10:12 am on October 29, 2009 by Ed Morrissey
The Commerce Department announced an end to the worst recession in decades today, as the third quarter of 2009 showed an annualized growth rate of 3.5%. That beat analyst expectations, which had floated around 3.0-3.3%. Federal government and consumer spending accounted for most of the growth:
The economy grew in the third quarter for the first time in a year as consumer spending and investment in new home-building rebounded, data showed on Thursday, unofficially ending the worst recession in 70 years.
The Commerce Department, in its first estimate of third-quarter gross domestic product, said the economy grew at a 3.5 percent annual rate, the fastest pace since the third quarter of 2007, after contracting 0.7 percent in the April-June period.
The growth pace in GDP, which measures total goods and services output within U.S. borders, was above market expectations for a 3.3 percent rate. The economy last grew in the second quarter of 2008.
That may also be the bad news. Sales of new homes fell last month, and inventories are not growing. With the government tax credit expiring, those new-home sales and construction will likely fall off. The third-quarter growth in that area will almost certainly represent sales shifted from future quarters, which means that the next quarter will get negatively impacted from this growth.
One key indicator continued to move downward significantly, although Reuters only reports it in the final paragraph:
Business investment fell at 2.5 percent pace, with investment nonresidential structures dropping 9 percent, a reflection of ongoing problems in the commercial property market.
In other words, what we had in the third quarter was not long-term growth based on solid investment in business. We had a flurry of federal spending and consumer behavior predicated on highly temporary government interventions, like Cash for Clunkers and the homebuyer tax credit. That may be enough to make the administration look good for the next three months, but only for that long if they don’t stimulate real investment instead of using these gimmicky programs. If we have a double dip recession after these gimmicks end, Barack Obama won’t have George Bush to kick around any longer on the economy. He’ll own it after this.
Update: In an article headlined by the AP that “First-Time Jobless Claims Drop Less Than Expected,” it turns out that they haven’t dropped hardly at all:
The number of people claiming jobless benefits for the first time dropped less than expected last week, evidence that the labor market remains weak even as the economy is recovering.
The Labor Department said Thursday its tally of newly laid-off workers seeking unemployment insurance fell by 1,000 to a seasonally-adjusted 530,000. Analysts expected a steeper drop to 521,000, according to a survey by Thomson Reuters.
The report comes the same day the Commerce Department said the economy grew at a 3.5 percent pace in the July-September quarter, snapping a streak of four straight quarters of decline. But the economy isn’t growing quickly enough to spur much hiring.
Joblessness is always a lagging indicator, but the downturn in investment in Q3 shows that the “growth” was more gimmick than reality — which is another reason why joblessness continues to increase.
Blowback
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I am in neither. I live in Frankfort, IL. My sign-on name si a splce of Washington and Jefferson.
A.H. did a good job with their downtown 10 years ago…looks nice. I assume those areas are having a little tougher time with Motorola’s issues.
WashJeff on October 29, 2009 at 1:04 PM
–Yes, but it looks like Motorola’s been backing out of the Arlington Heights facility on Shure Blvd. ever since I left the company. I heard it’s empty. MOT also pretty much abandoned Phoenix as well.
Jimbo3 on October 29, 2009 at 1:14 PM
None of this matters. The American economy is about to completely collapse. The Fed has increased the money supply by 120%. During Carter, they increased it 15% and we got 12% inflation, 10% unemployment and 20% interest rates.
We are going DOWN and there is nothing that can be done now. Get out of dollars and get your money offshore. Find a hidey-hole in the Caribbean and stock up on staples.
lonesomecharlie on October 29, 2009 at 1:19 PM
The recession IS over.
Don’t misunderstand that statement. It doesn’t mean that the economy is good.
blink on October 29, 2009 at 1:20 PM
Cue trumpet fanfare, laurel wreaths and trail of chained political captives as Obama takes credit for “saving the American economy from Bush.”
And proceeds to leverage every inch of his political capital to socialize and bankrupt the nation.
spmat on October 29, 2009 at 1:20 PM
Beck talked about this months ago. If the government -really- believes that economic growth is happening, they must immediately start shrinking the money supply or the massive inflation kicks in.
If government doesn’t do so, they either don’t believe its happening (I believe this) or they are incompetent and want the currency to collapse.
lorien1973 on October 29, 2009 at 1:21 PM
It’s great to invest when people are saying things such as this.
blink on October 29, 2009 at 1:22 PM
You’re right. I think rate cuts will follow soon.
blink on October 29, 2009 at 1:23 PM
This is EXACTLY what people will believe. How are you going to disprove it?
blink on October 29, 2009 at 1:24 PM
I used to work in the Libertyville facility on Iridium (1993 – 96).
I was by the AH facility fall of 2008. Wow, what a difference. All the strip mall office are unused and the parking lot look like it was 1/3 full.
Thrown in the disaster in Harvard too.
WashJeff on October 29, 2009 at 1:25 PM
He talked about this yesterday at some length too, from what I’ve been told. At this point in time I honestly don’t see any way out from the national debt apart from defaulting.
Do you mean rate hikes? Because they can’t really cut rates any lower than they currently are.
BadgerHawk on October 29, 2009 at 1:27 PM
What I cannot get my brain around is how the money is going to get into the system this time around. This money enteres the system when the banks start making loans. Since very little buildinds need to be built in the next few years, what does that leave for financing? New businesses?
WashJeff on October 29, 2009 at 1:28 PM
Yes, thanks. Rate hikes.
blink on October 29, 2009 at 1:35 PM
Turbulent times produce opportunities isn’t a news flash, but to capitalize on them requires skill and luck.
No they won’t. People believe their wallets. The average person doesn’t have the capital or the knowledge to take advantage of the turbulence, so they won’t be able to participate in the jobless recovery. They will however see their taxes, and real cost of living rise while their job prospects continue to suffer, and that is what they will believe, no matter what the talking heads on TV say. It’s one of the few instances where the public deviates from the herd mentality.
DFCtomm on October 29, 2009 at 1:36 PM
Great question. There are plenty of great projects out there in desperate need of financing. Just completing the stranded building is a big enough opportunity right now.
blink on October 29, 2009 at 1:37 PM
This misunderstood news will lead to an actual recovery. If their wallets improve, then they will give Obama all the credit.
blink on October 29, 2009 at 1:39 PM
The money won’t make it into the system, because banks are going to horde every penny in an effort to shore up their off book, and over valued liabilities.
DFCtomm on October 29, 2009 at 1:40 PM
What mechanism will lead to an improvement in their wallets, since it won’t be job creation.
DFCtomm on October 29, 2009 at 1:42 PM
Xiphos on October 29, 2009 at 1:42 PM
This is what is happening now. For inflation to go crazy, this money needs to be loaned out. And that is my quesstion…loaned out for what?
We have plenty of real estate for the next 5 years. High taxes and excessive regulation is not going to incentvize business to build\upgrade plants in the USA.
WashJeff on October 29, 2009 at 1:45 PM
I don’t think you will see hyper inflation right away. I look for the world to slowly start to imagine a global economy without the U.S. as consumer #1, and when that happens then they will be free to cut off our lending. Right now they aren’t sure how it’s all going to work, and they need our consumption to sustain much of their own economy.
DFCtomm on October 29, 2009 at 1:51 PM
GDP growth above 2% will create jobs. Not quickly, but I think the MSM will loudly applaud unemployment dipping below 8%.
blink on October 29, 2009 at 2:04 PM
Is that like GDP Growth Growth or Fake Bozo GDP Growth?
We haven’t yet had real growth. Propaganda employs only the writers, and they dont earn or spend much.
dogsoldier on October 29, 2009 at 2:10 PM
GDP growth.
blink on October 29, 2009 at 2:13 PM
A couple of points:
- Forget about the economy collapsing, we are looking at something far, far worse; the monetary system is about to collapse. This nation can live through a depression, but we cannot exist without the dollar.
- The actual monetary inflation is far higher than 120%. The Fed swapped out $2 trillion for essentially worthless toxic assets. That money doesn’t get counted as monetary inflation (as the Fed still carries the myth of assets on their balance sheet) but it is printed money as much as anything, since those assets probably aren’t worth any more than $200 billion.
Yeah. This nation is headed for true disaster. It’s amazing how people have pushed memories of Sept/Oct 2008 out of their minds, as if it had never happened and will never happen again. The unfortunate truth is that we are in the eye of the storm, now, and when the crisis goes hot, again, we won’t have any money or credit to buy time with. Of course, there will be some mad printing, then, to stave off the inevitable, but that will just lock us into the path and assure the total destruction of our dollar.
Most people have no idea, whatsoever, what we are headed for. It will be something that this world has never seen before because, unlike Iceland or Zimbabwe or Albania or Mexico or any of the other monetary collapses in history, the US dollar is too big to rescue. No one can bail us out. People just don’t understand what that portends.
I don’t know about Carribean islands, but the US is not going to be a safe place to be.
progressoverpeace on October 29, 2009 at 2:31 PM
The new GDP is a measure of the growth of government.
Dasher on October 29, 2009 at 2:39 PM
The main problem is that we are eventually going to hit the new level of production appropriate for the amount of government choking of our economy, and not go up from there. I didn’t expect any upswing in GDP yet, but this could be just a random fluctuation or due to borrowing production from China — I have the feeling this is more of a failure of GDP as an economic indicator than the end of this recession.
Count to 10 on October 29, 2009 at 2:40 PM
Yes. GDP are raw dollar figures. You have to take into accunt the dollar weakness and monetary inflation to arrive a true assessment of actual value produced.
progressoverpeace on October 29, 2009 at 2:43 PM
Damn system ate my last post.
Yes. GDP is a raw dollar figure that doesn’t take into account monetary inflation or dollar weakness.
progressoverpeace on October 29, 2009 at 2:50 PM
I used to work in the Libertyville facility on Iridium (1993 – 96).
I was by the AH facility fall of 2008. Wow, what a difference. All the strip mall office are unused and the parking lot look like it was 1/3 full.
Thrown in the disaster in Harvard too.
WashJeff on October 29, 2009 at 1:25 PM
–You and I may well have crossed paths–and may have even met–in our time at Mot. Did you ever get to the Tower in connection with that project?
Jimbo3 on October 29, 2009 at 2:51 PM
You’re right. I think rate cuts will follow soon.
blink on October 29, 2009 at 1:23 PM
Do you mean rate hikes? Because they can’t really cut rates any lower than they currently are.
BadgerHawk on October 29, 2009 at 1:27 PM
–Barron’s said two weeks ago that the Fed Funds rate needs to go up to about two percent in the next few quarters. Once clear signs of improvement show, the Fed needs to start gradually raising rates. (I’m tied up with something, so can’t blog much today).
Jimbo3 on October 29, 2009 at 2:53 PM
Bingo!!!
The GDP is the sum of consumer purchases, business investment and government spending. Virtually all of the GDP increase reflected government spending. Our government spending money it does not have – Hard to see the positive in this……
Oopsdaisy on October 29, 2009 at 2:55 PM
No. The insistent whine of the neoKeynesians during the 1980s was that Reagan failed to spend enough. “Social investment” was supposed to be around 8% of GDP. The argument was that Reagan’s tax cuts created a “false” immediate burst that could not be sustained over the long run–which must be news to Apple, DHL and Walmart.
Chris_Balsz on October 29, 2009 at 2:57 PM
When the DEPRESSION starts after the Christmas season tanks and retailers start declaring bankruptcy…
dominigan on October 29, 2009 at 2:58 PM
I made a prediction about 10 or 11 months ago that inflation wouldn’t start until this December-ish, and a two percent rate hike would indicate them trying to get out in front of that.
I’m actually less concerned about inflation in the short term than I was back then, partly because the GDP ‘growth’ this quarter is so artificial. I don’t really see much evidence of banks lending more, or people spending more.
However, once inflation starts it’s going to be a real m*therf*cker, and rates are going to have to climb really quickly to stay in front of it. I’m about two years away from a new mortgage, so from a purely sellfish standpoint maintaining the lowest rates in history suits me ok.
BadgerHawk on October 29, 2009 at 3:01 PM
This is what is happening now. For inflation to go crazy, this money needs to be loaned out. And that is my quesstion…loaned out for what?
We have plenty of real estate for the next 5 years. High taxes and excessive regulation is not going to incentvize business to build\upgrade plants in the USA.
WashJeff on October 29, 2009 at 1:45 PM
I don’t think you will see hyper inflation right away. I look for the world to slowly start to imagine a global economy without the U.S. as consumer #1, and when that happens then they will be free to cut off our lending. Right now they aren’t sure how it’s all going to work, and they need our consumption to sustain much of their own economy.
DFCtomm on October 29, 2009 at 1:51 PM
–You almost never have inflation in the absence of wage increases. I do think inflation will come, but not until employment bounces back in a very meaningful way. That’s why I’m only going out about 8 years on any corporate bonds I buy–I think inflation will kick up in about 3 years.
Jimbo3 on October 29, 2009 at 3:02 PM
A little off topic, but I thought I would post this email I got the other day. Since, as Conservatives and such, we are all racists now, it seemed appropriate.
> BUCHANAN TO OBAMA
> By Patrick J. Buchanan
>
> Barack says we need to have a conversation about race in America. Fair enough. But this time, it has to be a two-way conversation. White America needs to be heard from, not just lectured to. This time, the Silent Majority needs to have its convictions, grievances and demands heard. And among them are these:
>
> First, America has been the best country on earth for black folks. It was here that 600,000 black people, brought from Africa in slave ships, grew into a community of 40 million, were introduced to Christian salvation, and reached the greatest levels of freedom and prosperity blacks have ever known. Wright ought to go down on his knees and thank God he is an American..
>
> Second, no people anywhere has done more to lift up blacks than white Americans. Untold trillions have been spent since the ’60s on welfare, food stamps, rent supplements, Section 8 housing, Pell grants, student loans, legal services, Medicaid, Earned Income Tax Credits and poverty programs designed to bring the African-American community into the mainstream. Governments, businesses and colleges have engaged in discrimination against white folks — with affirmative action, contract set-asides and quotas — to advance black applicants over white applicants. Churches, foundations, civic groups, schools and individuals all over America have donated their time and money to support soup kitchens, adult education, day care, retirement and nursing homes for blacks.
>
> We hear the grievances. Where is the gratitude???
>
> Barack talks about new ‘ladders of opportunity’ for blacks. Let him go to Altoona? And Johnstown, and ask the white kids in Catholic schools how many were visited lately by Ivy League recruiters handing out scholarships for ‘deserving’ white kids.? Is white America really responsible for the fact that the crime and incarceration rates for African-Americans are seven times those of white America? Is it really white America’s fault that illegitimacy in the African-American community has hit 70 percent and the black dropout rate from high schools in some cities has reached 50 percent?
>
> Is that the fault of white America or, first and foremost, a failure of the black community itself?
>
> As for racism, its ugliest manifestation is in interracial crime, and especially interracial crimes of violence. Is Barack Obama aware that while white criminals choose black victims 3 percent of the time, black criminals choose white victims 45 percent of the time?
>
> Is Barack aware that black-on-white rapes are 100 times more common than the reverse, that black-on-white robberies were 139 times as common in the first three years of this decade as the reverse?
>
> We have all heard ad nauseam from the Rev. Al about Tawana Brawley, the Duke rape case and Jena. And all turned out to be hoaxes. But about the epidemic of black assaults on whites that are real, we hear nothing.
>
> Sorry, Barack, some of us have heard it all before, about 40 years and 40 trillion tax dollars ago.
>
> This needs to be passed around because, this is a message everyone needs to hear!!!
stacy on October 29, 2009 at 3:09 PM
No, I did not go to the tower. I was a freshout when I started and I was not working directly on the phone. I was working on a simulator for testing the phone. The stuff I was working on was eventually sold to HP (Agilent) and then sold back to Motorola.
If you were doing patent stuff, then you defintely crossed paths with people I worked with.
WashJeff on October 29, 2009 at 3:10 PM
Wait for the revisions in a month or so. This is BS.
Ay Uaxe on October 29, 2009 at 3:16 PM
I’m not sure what the “almost never” is there for. Of course, economists had claimed that inflation without wage increases and growth was impossible before we got hit with stagflation thanks to Carter. I guess, having somethign that genius economist claimed was impossible, but then happened 30 years ago can qualify as “almost never”, but you are about to see “almost never” again, and in a way that makes the stagflation of the 70′s look like child’s play.
Monetary inflation doesn’t require wage increases or anything of the sort to cause price inflation. And that can happen while the economy is being saddled down with anti-growth, anti-competitive policies that compound the situation. This is exactly what the feral government is driving us towards. Merrily so.
Employment isn’t bouncing back. But inflation is definitely coming. And not normal inflation. We are about to experience real, nation-crushing, third-world inflation, which will not last all that long because the monetary system will just collapse under its weight.
progressoverpeace on October 29, 2009 at 3:20 PM
Why 8 years if you think inflation will start in about 3? I’m guessing you see inflation starting very slowly at first.
I have about all I’m comfortable putting into the market in slow, steady companies whose yields have climbed up over 5 or 6%. I’m not even close to convinced the market’s staying up around 10 (even with the printing presses rolling and banks using the cheap money to prop up their balance sheets), and with yields on safer investments so paltry I’m using everything I save to pay down the mortgage.
I’m hoping I time things right, with being able to pick up a new mortgage in a couple years before rates shoot up (dramatically, in my opinion), then shift stuff into 10% cd’s for a few years.
BadgerHawk on October 29, 2009 at 3:24 PM
I suspect we’ll default from a lot of our debt before we get to the point of collapse. I actually hope we do, because the scenario of the dollar itself collapsing is pretty frightening. Defaulting on our debt, while still an awful picture, is at this point the only viable option I see. The numbers are simply too large to ever be overcome by taxes, or governmental belt-tightening.
BadgerHawk on October 29, 2009 at 3:26 PM
That’s why I’m only going out about 8 years on any corporate bonds I buy–I think inflation will kick up in about 3 years.
Jimbo3 on October 29, 2009 at 3:02 PM
Why 8 years if you think inflation will start in about 3? I’m guessing you see inflation starting very slowly at first.
BadgerHawk
–Cause I think I can live with the nominal rates for the last 5 years if they are close to 6% and because I shouldn’t have to take too big a hit on the bonds if I’m forced to sell them for some reason with only 3-4 years remaining in their terms. I originally thought we’d see a replay of the 12-14% interest rates in the early 80s, but I’ve kept my money short now for 15 or so months and am not seeing any signs of that in the near-term. I don’t think you’ll see the 10% CDs in less than 5-6 years, but I’ve been wrong before.
Jimbo3 on October 29, 2009 at 3:31 PM
You and I may well have crossed paths–and may have even met–in our time at Mot. Did you ever get to the Tower in connection with that project?
Jimbo3 on October 29, 2009 at 2:51 PM
No, I did not go to the tower. I was a freshout when I started and I was not working directly on the phone. I was working on a simulator for testing the phone. The stuff I was working on was eventually sold to HP (Agilent) and then sold back to Motorola.
If you were doing patent stuff, then you defintely crossed paths with people I worked with.
WashJeff on October 29, 2009 at 3:10 PM
–I’m more of a corporate/commercial lawyer, although I’ve done some IP stuff after Motorola. It’s a good thing you didn’t get too involved in Iridium (although it was a real fun project). It killed alot of people’s careers at Mot…which turned out to be a good thing in retrospect.
Jimbo3 on October 29, 2009 at 3:32 PM
It was a heck of a lot fun and, from an engineers perspective, very interesting. Horrible vision from the leaders of the company for not seeing cellular service spreading like it did.
WashJeff on October 29, 2009 at 3:35 PM
I hear you, but default is not going to happen. The reason why not is the same as the reason why we are brainwashed into thinking that inflation is safe but deflation is certain death. The fact is that it is politically feasible to inflate the money bit by bit (evne if the bits are big) because there is a slight bump in economic activity with each step of monetary inflation, but there is terrible pain to be had by draining the system – even though that would save the system.
What will likely happen is that people will thoroughly misjudge how much room we have and they will bring us right back to an immediate crisis without any resolution at all – think of the Iceland scenario, where all value is drained from the monetary system in an instant.
Part of this will be unintentional, but a good part of it is entirely intentional on the part of The Precedent. That’s why he is pursuing such nation-crshing policies in a time when we are perched over the monetary precipice, to begin with. Who wastes $800 billion on political payoffs when a nation is as vulnerable as we are, now, if not with the intention of draining us dry and then killing everything?
No. Unfortunately, there will be no escape from what we are headed towards and there will be no pre-emptive default to save the dollar. They are going to run us right into the wall. Social and economic justice, you know. The Precedent told us he was going to do it, and he’s been working hard towards it ever since he first occupied the White House.
progressoverpeace on October 29, 2009 at 3:42 PM
It’s a good thing you didn’t get too involved in Iridium (although it was a real fun project). It killed alot of people’s careers at Mot…which turned out to be a good thing in retrospect.
Jimbo3 on October 29, 2009 at 3:32 PM
It was a heck of a lot fun and, from an engineers perspective, very interesting. Horrible vision from the leaders of the company for not seeing cellular service spreading like it did.
WashJeff on October 29, 2009 at 3:35 PM
–They figured (among other things) that the various cellular systems would never find a way to make them compatible. You gotta also remember that the system was initially designed in 1989-1990. Cellular was just starting to be commercially available at that point and people only had car phones or “bricks” for handsets. Remember that Mot effectively missed out on the whole digital conversion from analog in the mid 1990s, so it’s track record is not too good. But the new Droid looks awesome.
Jimbo3 on October 29, 2009 at 3:58 PM
Well Target just had to lay off 75+ people today so I don’t think things are as rosy as the idiots in Washington would like us to believe.
gophergirl on October 29, 2009 at 4:02 PM
The stockholders would have made out nicely if they sold the cellular unit int he early 90′s. But…hindsight is 20/20.
Droid does look good. Go Mot…always will root for the home team.
WashJeff on October 29, 2009 at 4:07 PM
Gimmicks are all this dog and pony show passing itself off as an administration have. That and blaming Bush. Did anyone really expect anything different?
jdkchem on October 29, 2009 at 4:55 PM
I would like the left to explain why they think any private business (besides “green boondoggles funded by government money or stimulus package receipients), should hire more workers, in this current climate?
The Obama “administration” is clearly anti-business, as are the incompetent Democrats in Congress.
Cap and trade along with health care “reform” are both huge anchors on our economy. Not to mention the prospects of Card Check.
Unless the left expects businesses to hire more people in order to lose money, I don’t see how they think the unemployment rate is going to shrink.
NoDonkey on October 29, 2009 at 5:00 PM
Sure, the Bush Recession is over.
But now we’re in an Obama Depression.
Inflated “growth” bubbles are still bubbles nonetheless and they will pop.
In order to absorb over 120% money production, inflation will have to top 78%.
Enoxo on October 29, 2009 at 5:02 PM
I think that it is a stretch to call it the Bush recession. Since the dems have controlled congress for the the last three years, the blame must be shared.
Johan Klaus on October 29, 2009 at 5:11 PM
Gee Ed, for someone with your particular predisposition, I would have never pegged you as a “glass/plate half-empty” kind of gal.
Good4Onan on October 29, 2009 at 5:18 PM
I could be wrong, but I don’t see this recession truly ending until the man who will make Hitler look like a toddler in comparison is revealed. I think that day is coming soon and this global financial crisis is setting the stage for his rise (Daniel 8:23).
apacalyps on October 29, 2009 at 5:46 PM
Mean Street: A Sham GDP for a Sham Economy
Just check out where the economy grew. Almost half — or 1.7% of the pickup in GDP growth came from “motor vehicle output.” That’s the summer’s $3 billion cash-for-clunkers program doing its thing. But at what cost?
Edmunds.com just released some compelling analysis on cash-for-clunkers. Apparently, it cost the U.S. taxpayer about $24,000 per vehicle sold. Edmunds gets that number by dividing the $3 billion by the 125,000 additional car sales generated by the program. The methodology makes sense to me, but click here and decide for yourself.
The White House would probably contend that it’s impossible to determine incremental sales — meaning each sale that only happened because of the government $3,500 to $4,500 subsidy. And that the sale of each and every car spurs economic activity well beyond the program’s $3 billion.
But isn’t it possible that the Edmunds.com analysis is actually understating the true costs to the taxpayer? What about the interest costs on the borrowed $3 billion? What about the cost of propping up GMAC so that it could underwrite cash-for-clunker loans?
That’s the catch with all this government intervention — lots of unforeseen consequences. And we never learn. The trillion dollar disasters with Fannie Mae and Freddie Mac haven’t stopped the government from tinkering with the housing market.
Consider another one of Washington’s smashing successes: the $8,000 credit for first-time home buyers. For the third quarter, “real residential fixed investment” — also known as “homebuilding” — jumped 23.4%. That boosted GDP by another 0.5%. Do you feel like hugging Harry Reid now?
But we’re not seeing the real cost of the homebuyer tax credit. This is very expensive stuff. The Calculated Risk blog figures the home-buyer credit costs the taxpayer $43,000 per incremental home sale. Goldman Sachs ran its own numbers, reckoning that each incremental home sale cost the taxpayer an astounding $80,000. Again, the methodology seems right to me, but decide for yourself.
And again, this analysis understates the program’s true costs. We don’t include the cost of all the fraud — even though we know thousands of false and improper claims are being filed. We don’t consider the cost of propping up the FHA, which is now underwriting all of the mortgages. And we can never calculate the true economic cost of messing with home prices – though the crisis over the last three years certainly gives us a hint.
So, let’s party as we welcome GDP growth. But never forget how the party ends – a group hug with lots of tears.
MB4 on October 29, 2009 at 6:01 PM
More double talk from the man with the forked tongue.
ITS A LIE !
bluegrass on October 29, 2009 at 6:15 PM
Think of Armageddon as the ultimate trailing indicator…
Terry_Dyne on October 29, 2009 at 6:24 PM
Yeah, Armageddon… a “trailing indicator,” reflecting what has previously happened as a result of sin.
apacalyps on October 29, 2009 at 7:15 PM
This is all bull, the economy did not grow…the Commerce Dept is an arm of the lying WH.
njpat on October 29, 2009 at 7:21 PM
Paper mache statistic.
Dr. ZhivBlago on October 29, 2009 at 7:38 PM
Yeah, the economy is doing really great. (rolls eyes)
SoulGlo on October 29, 2009 at 7:47 PM
Team Obama needs to replace the mop & bucket they’ve been using: Where the hell are the jobs?
TN Mom on October 29, 2009 at 7:48 PM
So the $24,000 we all got stuck with per car in the Cash for Junkers program essentially bought us 3.5% of economic growth?
Absolutely stupid.
ted c on October 29, 2009 at 8:13 PM
Where are the jobs?
ted c on October 29, 2009 at 8:14 PM
I’m friends with the manager of one of the local convenience stores here… In a town that has always been pretty “recession proof”…., with high wages to anyone with even moderate skills or potential… (For example; The going rate for a plumbers assistant trainee was $75 an hour a couple of years ago).
Well, my store manager friend had 150 applicants for a part time cashier/stocker job last week. A year ago they were begging for help and couldn’t get applicants even offering well above the going area rate for such work. 150 applicants for a part time job… in a town with a non-tourist population of eight thousand.
The manager of the local Motel-6 overheard our conversation, and he chimed in that while he hadn’t kept an exact count, he had been enduring a steady line of applicants for a part time housekeeping job at his place for the three days since his help wanted ad appeared in the paper.
Any ‘growth’ in the general economy in the last quarter was due to people maxing out their credit cards before declaring bankruptcy, not actual growth.
LegendHasIt on October 29, 2009 at 8:49 PM
That and endless gloating from Obama and his trolls
CWforFreedom on October 29, 2009 at 8:57 PM
IMO, the glass and the plate are full…at least for the slight majority of the table settings.
But more and more people are staring at a nice big portion of Jack Squat, and behind the first couple rows of stock in the pantry there’s nothing but air.
Dark-Star on October 29, 2009 at 9:11 PM
The numbers are intentionally rigged. Income down, employment down, govt. spending up… More like -2.2% growth. Not that they would lie, of course. It’s smoke and mirrors.
Jeff2161 on October 29, 2009 at 9:39 PM
Oh great, the recession is officially over. Nothing to see here folks, move along now. Nothing to see.
Mojave Mark on October 29, 2009 at 10:39 PM
Hey, why did we bail out AIG if we could keep GDP constant with government spending?
On reflection I don’t think interest rates will rise much. I forgot we’re living under fascism. The Fed will just demand banks carry larger reserves by a deadline. Those banks that dont’ make it will be nationalized and sold. Those that make it, will be ordered to convert their cash to bonds. No need to worry about calculating a safe rate.
Chris_Balsz on October 29, 2009 at 10:40 PM
GDP includes government spending.
There’s your sign.
BKennedy on October 29, 2009 at 10:43 PM
Wouldn’t be surprised. Our government has already proven perfectly willing to confiscate our gold stocks, our weapons, our land, our wealth in general…bank accounts were just lower on the list.
Dark-Star on October 29, 2009 at 10:51 PM
This GDP is an illusion. It’s based on cash for clunkers, and the 8K to new home buyers. Auto sales fell off a cliff after CFC was over and the 2 programs together cost the tax payer around 70K a piece to give a boost to car and house sales. Banks are not lending to businesses and they’ve doubled business interest rates. The only reason some companies are making money is the same reason small business owners are surviving…we’ve cut costs to the bone! It’s a good bet that if the Fed were audited, we’d see how much financial trouble we’re really in. Stock
tradersmanipulators can’t hold this market up forever.This econ is going down soon.Nalea on October 29, 2009 at 11:36 PM
The “Clinton Surplus”? That’s the second biggest lie about the Clinton Administration after “I did not have sex….”
This never was budget surplus in any of Clinton’s budgets. This is easily researched and disproven.
http://www.craigsteiner.us/articles/16
and now apparently Barry wants to employ Clinton’s fuzzy math principles.
Fed45 on October 30, 2009 at 3:01 AM
Lest we forget, the jobless figures don’t count for those who have given up all hope and run out of benefits.
{^_^}
herself on October 30, 2009 at 6:13 AM
What the Gov’t is doing is equivalent to using one credit card to pay off the debt on another credit card, but that switcheroo can only go on for so long until there is a CRASH.
Dhuka on October 30, 2009 at 6:23 AM
Okey.
Where did 3.5% rise go? RICH DEMOCRATS AND ITS ALLIES, LARGE BANKS, CAR COMPANIES, LARGE INSURANCE COMPANIES, LARGE DRUG MANUFACTUERS! Bwahahahahaha!
What happened to Poor Democrats? Still Jobless and waiting for another Stimulus.
TheAlamos on October 30, 2009 at 6:26 AM
Democrats are just transferring the wealth to its Rich and Multi-millionaire friends.
They use the poverty mantra to harass and imprison the voters into their Party. They have to keep those people POOR to ensure that they will stay Democrats and continue begging for Government alms.
That’s the framework in Cuba and other Latin American Socialist Dictatorial governments.
Congrats, Obama, the Won!
More secret parties and meetings in the White House!!!!
TheAlamos on October 30, 2009 at 6:30 AM
Well said
nyx on October 30, 2009 at 8:22 AM
Hey look – BHO saved/created over 1 million jobs! More bad news for the Party of No. At least you guys found the WMDs! For that the world is thankful.
simplesimon on October 30, 2009 at 8:29 AM
Wage increases are a symptom of inflation, not a cause of it.
MarkTheGreat on October 30, 2009 at 8:34 AM
Even Barry says it was only 30,000. Provided you are willing to double and triple count many of the jobs.
The WMDs were found.
MarkTheGreat on October 30, 2009 at 8:42 AM
And the child chimp keeps dancing. How do you sleep with that ring on a string coming out of your back?
You actually typed “saved/created”. The biggest example of poosy speak I have ever heard. Thanks for the phony economy pedo fan!
ClassicCon on October 30, 2009 at 8:56 AM
Keep telling yourself that, flag-waver!
simplesimon on October 30, 2009 at 9:03 AM
President Obama is in charge now, so it’s cool to wave the flag again.
Stop pwning yourself.
BadgerHawk on October 30, 2009 at 9:09 AM
don’t drool too much, here in Ft. Worth, with homesteading, we pay a bit over 2.9%
Annietxgrl on October 30, 2009 at 9:16 AM
Since when is telling the truth “flag-waving”?
Why do you say “flag-waving” as if it were a bad thing?
MarkTheGreat on October 30, 2009 at 9:16 AM
There were no WMDs. Your
fearlessfearful leader invaded the wrong country. Keep waving.simplesimon on October 30, 2009 at 10:20 AM
Yeah that’s why Clinton and Congress said the same thing in 1998, and so did the whole UN Security Council in 2003, and its why Daschle shoved the war vote to October 2002 so Democrats could get on board before the midterms.
I bet you can recite your whole spiel from memory.
You’ll need to, when Obamanomics leaves you camping under a bridge, you won’t have the internet.
Chris_Balsz on October 30, 2009 at 10:43 AM
Yawn. Wow – 1998, 2002, 2003! But no one else invaded. Until the former male cheerleader came along. Then the following happened.
1. Invasion of wrong country.
2. $700B squandered
3. Thousands of American dead
4. Tens of thousands of Iraqis
deadliberated.5. Pilot costume donned, Mission Accomplished! declared.
6. Oops! No WMDs!
The End
simplesimon on October 30, 2009 at 10:50 AM
Fake GDP report -check
Fake Job report -check
Fake photo op at Dover -check
Time to go on a date and maybe tomorrow play some golf. Gosh its been a busy week.
dogsoldier on October 30, 2009 at 11:02 AM
I thought you guys were backing away from “Afghanistan is the right war” talking point, or is the right war now Pakistan?
DFCtomm on October 30, 2009 at 11:40 AM
Good. Numbers are a great memnonic device.
Chris_Balsz on October 30, 2009 at 11:40 AM
Hubby laid off today. We’ve been on death watch for months now. He has some prospects, hopefully he’ll have a job soon. Before he was laid off, he gave up his vacation time and took a pay cut. Good thing the economy is “recovering” and that the President has created so many new jobs. I love Hope & Change.
kringeesmom on October 30, 2009 at 2:40 PM
Which was the right country to invade?
blink on October 30, 2009 at 3:45 PM
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