U.S. Economy Grows Most Since 2011

[DonViejo]

Source: The Daily Beast

The U.S. economy grew at a revised 4.6 percent annualized rate in the second quarter of 2014, the Commerce Department announced Friday. That is up from the previous estimate of 4.2 percent. The increase follows a 2.1 percent decline in the first quarter of the year, which economists are now viewing as an aberration. The spring growth rate is the highest since the final quarter of 2011. The increase was largely triggered by increased corporate spending on equipment and properties, as well as investments in nonresidential properties.

Read it at Bloomberg News

###


Read more: http://www.thedailybeast.com/cheats/2014/09/26/u-s-economy-grows-most-since-2011.html

[RussBLib]

1. an eight-year high

that was a brutal winter in the 1Q14

To provide some additional context, 4.6% growth is tied for the best quarter since the start of the Great Recession. The last time we saw GDP growth stronger than this was the first quarter of 2006 – more than eight years ago, long before the start of the downturn and the 2008 crash.

What’s more, the shift from -2.1% (January through March) to +4.6% (April through June) is easily the largest positive quarter-to-quarter swing since the start of the Great Recession is late 2007.

more

I hope the markets will pull their heads out of their asses.

[progressoid]

2. Economy grew for who?

[AllTooEasy]

4. It did for me!

I'm a SW engineer. I received a %15 raise last month! My wife, environmental engineer, received an %8 raise and a promotion. Our stocks and 401K are up!

The easiest way to win on the stock market - buy stocks like crazy when a Dem is elected President. Sell everything when a Rep is elected. Hasn't failed me yet.

[progressoid]

6. When people are living paycheck to paycheck, investing isn't an option.

76% of Americans are living paycheck-to-paycheck

Roughly three-quarters of Americans are living paycheck-to-paycheck, with little to no emergency savings, according to a survey released by Bankrate.com Monday.

Fewer than one in four Americans have enough money in their savings account to cover at least six months of expenses, enough to help cushion the blow of a job loss, medical emergency or some other unexpected event, according to the survey of 1,000 adults. Meanwhile, 50% of those surveyed have less than a three-month cushion and 27% had no savings at all.

http://money.cnn.com/2013/06/24/pf/emergency-savings/

Stock Market Surge Bypasses Most Americans, Poll Shows

More than three-quarters of Americans say the five-year bull market in U.S. stocks has had little or no effect on their financial well-being, according to a Bloomberg National Poll.

Seventy-seven percent of respondents dismissed the 176 percent rise in the Standard & Poor’s 500 Index (SPX) since its March 9, 2009 financial crisis low, according to the poll, taken March 7-10. Barely one in five -- 21 percent -- said the market’s gains have made them “feel more financially” secure.
...

The poll’s findings reflect the concentration of financial assets among better-off Americans. Only about half of Americans own stock, either directly or through retirement accounts, according to the Fed’s 2010 Survey of Consumer Finances.

http://www.bloomberg.com/news/2014-03-12/stock-market-surge-bypasses-most-americans-poll-shows.html

Roughly 36 percent of working-age survey respondents said they have less than $1,000 in savings and personal retirement investments, and 60 percent reported having less than $25,000 saved. The numbers are similar among retirees surveyed: 58 percent have less than $25,000 on hand, and 29 percent have less than $1,000 saved.

http://thinkprogress.org/economy/2014/03/20/3416808/retirement-savings-survey/

Study: 401(k) retirement plans failing most workers
The report from the Economic Policy Institute, a liberal-leaning public policy think-tank, illustrates how the shift from pensions to individual savings accounts has affected retirees. The authors find that it is the wealthiest workers whoare benefiting the most because they can actually contribute enough to make 401(k) plans work for retirement.
"401(k)s were never designed to replace pensions for most workers. They serve primarily as a tax shelter for high earners," said economist Monique Morrissey, the report's co-author, in a statement. "The 401(k) revolution has been a disaster, yet some policymakers are calling for cuts to Social Security, which will be the only significant source of retirement income for most Americans--if they are able to retire in the first place."

The report also found:

Households earning in the top fifth accounted for 72 percent of total savings in retirement accounts in 2010 and were the only income group that had more than their annual income saved in these accounts.

Participation in defined-benefit pensions by workers from 25 to 61 years old declined over the past decade, from 52 percent in 2000 to 45 percent in 2010.

For single people, black and Hispanic households and those headed by someone without a college degree, the median household has no savings in retirement accounts.

On average, white households have more than six times as much saved in retirement accounts as Hispanic or black households.
http://www.cbsnews.com/news/study-401k-retirement-plans-failing-most-workers/

[progree]

9. Source of "Distribution of Average Income Growth During Expansions" graph in post #2

for more context... and for anyone wanting to dig deeper

http://www.slate.com/blogs/moneybox/2014/09/25/how_the_rich_conquered_the_economy_in_one_chart.html

How the Rich Conquered the Economy, in One Chart, Slate.com, 9/25/14

This one, from Bard College economist Pavlina Tcherneva ( https://twitter.com/ptcherneva ) , somehow still feels astonishing, and has stirred up a bunch of attention today ( http://www.vox.com/xpress/2014/9/25/6843509/income-distribution-recoveries-pavlina-tcherneva?utm_medium=social&utm_source=twitter&utm_campaign=mattyglesias&utm_content=thursday ). It shows how much of U.S. income growth has been claimed by the top 10 percent of households during economic expansions, and how much was claimed by the bottom 90 percent.

[progree]

10. And Scott Winship (@swinshi) takes issue with it

http://economics21.org/commentary/no-rich-are-not-taking-all-economic-pie-Pavlina-Tcherneva

It's a long read, I read most of it, skimmed some of it. Frankly I'm out to sea on all this. What I get out of the first read is that it really is complex and the data that is needed isn't all there. It's also disappointing that Winship leaves out what's after 2007:

In the rest of the charts, I will stick with business cycles and I will leave out the post-2007 (ongoing business cycle). I do this because both the bottom 90 percent and top 10 percent experienced losses from 2007 to 2010 and because the estimates for the share of income gains going to each group shift wildly depending on the measure used. That is because the overall decline is often not very large, which means the denominator in the “share of losses going to the top” fraction is small relative to the numerator, resulting in unstable estimates. Primarily, however, I omit years after 2007 because the current business cycle is not complete (and may not be complete for some time).

https://twitter.com/swinshi

Pavlina Tcherneva ( https://twitter.com/ptcherneva ) is working on a reply.

Pavlina R Tcherneva @ptcherneva · 15h 15 hours ago
Coming up soon: a debunking of @swinshi 's critique of my chart.

[sendero]

3. Sure..

... the good quarters are harbingers of strong growth, and the bad quarters are an aberration.

Whether these "economists" are lying or are simply stupid (I lean towards the latter since virtually none of them saw 2008 coming) makes no practical difference. We're 6 years into a "recovery" that was supposed to take 18-24 months and there is no real recovery in sight, just a lot of number fudging and hand waving.

When interest rates get back to normal (don't hold your breath, it won't be any time soon if ever) then I'll listen to "recovery" talk. In the current environment, talk is all it is.

[AllTooEasy]

5. Bullshit! Who told you that the recovery would take 18-24 months?!

The President never said that, not even on the inauguration. No Dems or serious economists every said that.

Nice Faux News talking points!

[sendero]

7. You are wrong...

..... just about every economist out there including a certain "professor" here said that.

[progree]

8. I never heard any economist or administration official say 18-24 months either

As for some message board pundit here, that doesn't count.

(That said, I certainly agree that 6 years to get to this rather dismal point in a recovery is pretty bad)