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U.S. economy grows 6.4% in Q1, and it's likely just the start

14 Comments
By MARTIN CRUTSINGER

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All an illusion. I feel a real crunch coming.

-1 ( +1 / -2 )

The U.S. economy grew at a solid 6.4% rate in the first three months of the year, setting the stage for what economists believe may be the strongest year for the economy in about seven decades.

And Trump could never get much above 3% during his entire four years - and cratered the economy in 2020....

So much for the big fairy tale that Trump was an economic genius...and hardly stable...

0 ( +2 / -2 )

This is all down to Joe’s fabulous policies and his dynamic leadership.

1 ( +3 / -2 )

Trump could never get much above 3% during his entire four years - and cratered the economy in 2020....

Come now, tiger.

Coronavirus cratered the economy in 2020, across the globe.

You can blame Trump for his handling of coronavirus in several respects (not all as the vaccination program produced vaccines in warp speed), but the economy prior to that was looking good with really low unemployment rates for minority groups and the like.

And now the economy is on the rebound from last year’s cratering, in a V shaped recovery.

Judge the current administration after they have actually made some policy changes, like these huge tax increase proposals.

-1 ( +1 / -2 )

Wow!

1 ( +1 / -0 )

Trump could never get much above 3% during his entire four years - and cratered the economy in 2020....

Come now, tiger.

Coronavirus cratered the economy in 2020, across the globe.

Excuses, excuses...you sure it wasn't Hugo Chavez or Elvis?

You can blame Trump for his handling of coronavirus in several respects (not all as the vaccination program produced vaccines in warp speed), but the economy prior to that was looking good with really low unemployment rates for minority groups and the like.

Fairy tale. Look at the GDP numbers for 2017 to 2020 - miserable 3% in 2017 going down to a measly 2% in 2019, and that's even before COVID... The Trump economy was feeble at best - a disaster at worst...

https://www.statista.com/statistics/188185/percent-change-from-preceding-period-in-real-gdp-in-the-us/

And now the economy is on the rebound from last year’s cratering, in a V shaped recovery.

Yes, a recovery under the Biden administration...thanks for admitting that...

Judge the current administration after they have actually made some policy changes, like these huge tax increase proposals.

You mean taking back the unfunded tax windfall the Repubs passed in 2018 for the Top 1%? Sure, run on that one on 2022/24. Gas tax for the middle class - tax breaks for the rich... That's a real winner for you...

1 ( +2 / -1 )

I have difficulty understanding economics at times. (Physics is easier.) But for example, if consumer spending grew at 11.4%, could that be due to price increases rather than more goods being bought? And if so, does that really indicate growth?

Please be gentle with your answers.

1 ( +1 / -0 )

"if consumer spending grew at 11.4%, could that be due to price increases rather than more goods being bought"

Depends on whether the figures being quoted are in real terms or nominal terms. If nominal, they would include the inflation rate which you would need to subtract from the nominal rate to get the real rate.

The actual formula to get real rate from nominal rate and inflation is slightly different but subtraction works as a good approximation.

1 ( +1 / -0 )

"Boussour forecast that GDP growth in the current April-June quarter will surge to an annual rate of 12% and growth for the entire year will come in at 7.5%. That would be the best annual performance since 1951."

This is because the GDP for most countries (not just the US) contracted last year due to COVID. Now since some countries are opening up after controlling the pandemic and increasing vaccinations it is natural that the GDP growth rate will recover the lost ground. These figures are therefore misleading. Once all economies go back to being at pre-COVID levels then we get a true picture of GDP growth rates.

1 ( +1 / -0 )

And Trump could never get much above 3% during his entire four years - and cratered the economy in 2020....

So much for the big fairy tale that Trump was an economic genius...and hardly stable...

This is all down to Joe’s fabulous policies and his dynamic leadership.

None of this is correct. Mr. Trump as much as he disgusts me and as economically brainless as he is, isn't the reason the economy tanked in 2020. By the same token very little Mr. Biden has done is responsible for the current strong GDP growth. The factors that affected the US economy were almost entirely determined at a local level. State and local governments made decisions for their constituents that were made with little or no coordination with the Federal government but those decisions had massive effects on economic activity. The Fed too is along for the ride. The Fed didn't make decisions to reduce factory output or cap oil and gas wells due to a lack of demand for oil. Does anybody even remember what happened in April 2020 when oil futures went into negative territory? There was no place left to store oil, negative futures values implies oil producers should pay people to take their oil. Instead they capped wells. Now demand has risen and unfortunately you cannot simply turn a well back on. You have to run a cleanout rig down the bore to restore flow. You can only do that so quickly and there are a finite number of cleanout rigs. That means a short term shortage and rising prices for oil and gas. Same thing with ramping up factories, increasing steel outputs, cutting trees for lumber and a whole bunch of other things that are now in a short term shortage. Add to that a global maritime industry and Chinese ports that are in absolute turmoil. Ships are backed up outside major ports anticipating delays of weeks and in some cases off China months. While those ships wait in line at ports they are not hauling freight so there is a shortage of hulls to haul things. The ports at LA and Long Beach just had all time records for the number of containers offloaded in a single month. LA moved 10 million. That is a staggering number and yet there are ships backed up waiting to unload. Empty containers are in very short supply and some shippers are sending empties right back to China instead of letting US firms load things on them for export. These are all decisions made outside of any kind of government control but they affect prices and economic activity. Before the pandemic the Fed was looking at deflation as the major threat, and btw that is still the long term threat, but in the short to medium term until Covid related problems in supply chains work themselves out, inflation might be a problem. The guess for them is how to control short term inflation without aggravating the longer term deflationary pressures on the global economy.

1 ( +1 / -0 )

I have difficulty understanding economics at times. (Physics is easier.) But for example, if consumer spending grew at 11.4%, could that be due to price increases rather than more goods being bought? And if so, does that really indicate growth?

Unless inflation was growing at 11.4% even the nominal spending increase would show a substantial increase in consumer spending. Btw, you might smile to know that economists use a lot of math borrowed from physics and we often talk about the "laws of motion" when describing the way economic measurements change in response to a change in an input value. We love our second partial derivatives, Lagrange Multipliers and determinants. Well, maybe not so much the determinants but we have software for those.

1 ( +1 / -0 )

Mr. Trump as much as he disgusts me and as economically brainless as he is, isn't the reason the economy tanked in 2020.

Yes he is. The leader of a country isn't elected only for the good times, and in my mind, the good times aren't how good leaders are proven, as the difference in leadership when times are good is simply in policy. Competence in leaders is proven by their ability to respond to unexpected situations. THAT's what I want in a leader. A competent leader will take responsibility for their country when times get tough, and ensure that the country is protected. Look at the leaders of NZ and Australia for examples. Look at the leaders in Canada - the response by British Columbia will be used as an example for decades on how to effectively manage a pandemic.

Trump got handed an economy that was working well, and he ramped it up by removing regulation. This is not competency, and had we seen another four years of Trump we would have seen his out of control train leap the tracks.

But we didn't see that, because we got hit with a crisis, one he was utterly unable to respond to, and he failed, so the economy collapsed.

If your theory that it wasn't his fault were correct, we wouldn't have seen any company survive 2020 with an intact economy. The very existence of countries that dealt with the same crisis, and didn't let their economies crash, proves your theory wrong.

The financial crash of 2020 is entirely Trump's fault.

-2 ( +0 / -2 )

The financial crash of 2020 is entirely Trump's fault.

Again that is not true. The countries that did well were not federal republics with strong state governments. They had centralized authority and moreover had much smaller populations and economies to manage. In the US decisions made by the states and cities made or broke the economy during the pandemic. The Federal government has no authority one way or the other over state and municipal governments. Moreover many states and cities chose to go against the best advice of the medical profession regardless of any direction coming from the White House. That remains true today. States are quasi independent entities. That is both a strength and weakness of how the US government is constructed. Decisions made by many hundreds of cities, many of which are what are called charter cities that often have the authority to write laws that are different from and even conflicting with county ordinances and state laws are in aggregate what determined the fate of the US economy. That is mostly always the case btw.

1 ( +1 / -0 )

Again that is not true. The countries that did well were not federal republics with strong state governments.

The countries did well had competent leaders that were ready to do what was necessary to protect their people. Trump was willing to do what was necessary to protect his one-trick-pony economy.

You keep trying to say the leader of a country doesn't have responsibility for the country in times of difficulties. That's when they're the most important.

You are entirely wrong on this. It ALL lies in Trump's lap. I have no idea why you'd only want to elect leaders who are qualified when times are good, and not want leader who are actually qualified.

-2 ( +0 / -2 )

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