U.S. Economy Shakes Off Gloom
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  • Jacksonian Libertarian

    I disagree, the numbers coming out of this administration are politically biased. All the numbers are being adjusted later, then re-adjusted, and re-re-adjusted, and if the natural gas prices are dropping, gasoline prices are approaching $4 per gallon, and most people spend much more on gasoline.

  • Anthony

    Fed. Chairman before congress said interest rates are likely to remain low until 2014 (but unemployment rate is elevated concomitant with subdued inflation). Also, rise in gasoline prices nation wide may have moderating effect on consumer purchasing power….Nevertheless, you’re right economy expanded at 3% in 4th quarter ending – definitely positive news.

  • SC Mike

    Dow, DuPont, and others moved chemical manufacturing out of the US to Asia, primarily Indonesia, in the middle 2000s due to increasing costs of raw materials, primarily natural gas. With prices tanking in the US, there’s a race to spin up operations here.

    What’s Interesting is that the natgas glut in the US seems to be leading to investment in the infrastructure needed to export liquefied natgas (LNG) to China. A LNG terminal in Houston is underway.

    What’s ironic is that New England Senators did their best to squash terminals for receiving LNG in their region, ostensibly for security reasons. We, or perhaps investors, should thank them for preventing what now appears to be a stupid investment.

    Who knew that they could be right for once?

  • Americanus

    While every American should celebrate in the rejuvenation of the nation’s economy, I wonder whether there are other factors at work. The big untold financial narrative over the past year has been the immense amount of foreign (primarily Eurozone) money flowing into the U.S., seeking a safe haven. (It’s this desire for return of capital, rather than return on capital, which explains our present low interest rates). I haven’t crunched the numbers, but I would imagine that substantial sums of that have ended up in productive investments in US capital. For all the deigns of our Washington manderins, the ability of America to use foreigners’ money to make ourselves richer remains one of this nation’s enduring strengths.

    Still, it’s a nasty line to walk. If things get better in Europe, the short-term money flows back east, and we get a nasty interest rate spike. If things continue to get worse, however, it’s 1931 all over again.

  • Fred

    Paradoxically, economic good news in the short term is terrible news for the long term. It means Obama’s re-election is virtually assured (people generally being short-sighted, lazy, and stupid). That is a long term disaster. His redistributive economics is unstustainable. His energy policy will drastically increase the cost of fossil fuels, which he will attempt to replace with “clean energy” that does not work terribly well and is produced (when it is produced) by his corrupt cronies at exorbitant prices. His gutting of the military will at some point either necessitate a massive spending program (like Carter’s resulted in Reagan’s buildup) or cost us dearly in lost wars and disrupted interests. Since his domestic policies will bankrupt us, I fear the latter is more likely. Sorry folks, but this “good news” is absolutely not.

  • Some Sock Puppet

    I don’t trust anything coming out of this administration or the puppets below.

    The great and powerful Oz wants this thing to work, whatever it is – and it’s going to be a full press charge all the way to the next election or hell, whichever comes first.

    Maybe it’s getting better somewhere else, maybe some numbers are promising, but there’s just so much bad data out there.

  • ddh

    Let me point out a couple of problems hidden in that 3.0-percent seasonally adjusted real GDP growth rate.

    First, it is based on nominal GDP estimates, deflated by the implicit price GDP deflator. According to the Commerce Department, the deflator rose at 0.9-percent annual rate. Do you really believe we have less than 1-percent inflation?

    Second, much of the growth came in inventory accumulation. That would be sort of positive if demand in the first quarter of 2012 catches up. The data on durable goods orders released a few days ago, however, had the sharpest downturn in three years–definitely an ominous sign.

    Last, the data are seasonally adjusted by methods that are opaque, to say the least. We simply don’t know how good those methods are.

    Over the past few decades, the United States has been cutting its investment in economic data collection. While I can’t absolutely rule out political hanky-panky, I am pretty certain that economic data are less accurate than they were several decades ago, particularly at the inflection points of a sluggish business cycle.

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