Tag Archives: Consumer spending

Some Good News About The Economy

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On Wednesday, CNBC reported the following:

  • Gross domestic product jumped to 3% for the second quarter, better than the 2.3% estimate and reversing a 0.5% decline in the prior period.
  • Consumer spending rose 1.4% in the second quarter, better than the 0.5% in the prior period.
  • While exports declined 1.8% during the period, imports fell 30.3%, reversing a 37.9% surge in Q1.
  • President Donald Trump responded to the GDP report with a fresh demand for the Federal Reserve to lower interest rates.

In another article posted on Wednesday, CNBC reported:

  • Private payrolls rose by a seasonally adjusted 104,000 for the month, reversing a loss of 23,000 in June and topping the Dow Jones forecast for an increase of 64,000.
  • Wages rose at a 4.4% annual pace for the month, about in line with recent trends.

The first article mentioned reports:

The U.S. economy grew at a much stronger-than-expected pace in the second quarter, powered by a turnaround in the trade balance and renewed consumer strength, the Commerce Department reported Wednesday.

Gross domestic product, a sum of goods and services activity across the sprawling U.S. economy, jumped 3% for the April through June period, according to figures adjusted for seasonality and inflation.

That topped the Dow Jones estimate for 2.3% and helped reverse a decline of 0.5% for the first quarter that came largely due to a huge drop in imports, which subtract from the total, as well as weak consumer spending amid tariff concerns.

Financial markets reacted little to the report, with stock index futures mixed and Treasury yields higher.

“The word of the summer for the economy is ‘resilient,’” said Heather Long, chief economist at Navy Federal Credit Union. “The consumer is hanging in there, but still on edge until the trade deals are done.”

The second article reports:

Hiring at private companies rebounded at a stronger than expected pace in July, indicating the labor market is holding its ground, ADP reported Wednesday.

Payrolls rose by a seasonally adjusted 104,000 for the month, reversing a loss of 23,000 in June and topping the Dow Jones forecast from economists for an increase of 64,000. The June number was revised up from an initially reported loss of 33,000.

Though the pace of hiring is well off where it stood last year, the June total was the best since March and consistent with a slowing but still fairly vibrant jobs picture.

“Our hiring and pay data are broadly indicative of a healthy economy,” ADP chief economist Nela Richardson said. “Employers have grown more optimistic that consumers, the backbone of the economy, will remain resilient.”

At the present time, it looks as if hiring a businessman as President was a good choice for the economy.

Learning From The Past

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On Friday, The Daily Caller posted an article about the latest economic numbers released by the Biden administration. On the surface, they look wonderful. At closer examination, not so much.

The article reports:

The economy expanded by 2.8% from July to September, according to Commerce Department figures. The growth is said to be driven by consumer spending, also up 3.7% during this time. Job gains actually slowed to the lowest point since 2020, a sharp decline from 254,000 in September to just 12,000 in October, according to data from the U.S. Bureau of Labor Statistics (BLS). Yet the regime has plenty of excuses — storms and strikes — and touts how the unemployment rate remains unchanged at 4.1%. Meanwhile the inflation rate is approaching the Federal Reserve’s target, meaning it could lower interest rates as soon as next week. All told, things are looking alright — at least on the surface.

“Consumers are spending. Inflation is cooling. And the U.S. economy looks as strong as ever,” The New York Times giddily ledes with.

When the corporate media and financial regulators are on the same page, there’s always an instinctual reason to be distrustful. During the Biden-Harris administration, all the Very Smart People running the U.S. economy have made a habit of quietly revising their optimistic numbers after they come out. After all, it’s only the initial headlines that count.

The article includes the following screenshot:

There’s some history here–in the Biden administration (and possibly in previous administrations), the initial numbers are not always accurate.

The article concludes:

This might even be an understatement; the downward revisions on jobs numbers have been nothing short of egregious this year. The revised figures between Q1 2023 and Q1 2024 showed there were 818,000 fewer jobs added than initially reported. But the new figures did not trickle out until August 2024, at which point it was safe for CNN to admit that job growth was “far weaker” than many thought. The pattern has continued throughout the year as well, with the last two months’ figures being revised significantly downward after their initial release. August figures were revised down by more than half, from a gain of 159,000 to just 78,000. September was less drastic, but still dropped by 31,000 jobs after revision. With just a measly 12,000 jobs added last month, there’s hardly any room to revise without the figure turning negative. Only time will tell.

Downward revisions are also an issue in growth figures, albeit to a lesser degree. Already poor Q1 2024 growth rates of 1.6% were quietly revised to a sluggish 1.3% at the end of May.

It’s an undeniable pattern. We get these awesome economic releases, a barrage of friendly headlines and then months later quiet updates that dramatically alter the actual, final number. Either all the Very Smart People are much worse at this than they used to be, or there’s some shady politicking at play. With the numbers coming days before an extremely tight election, skepticism toward the latter is certainly warranted. Either way, there’s good reason to think these new economic numbers will go down. It’s only a matter of when.

If the people reporting these numbers are that far off, maybe we need new people reporting them.

The Impact Of Bidenomics

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On June 18th, Just the News posted an article about the impact of Bidenomics. Essentially Bidenomics is excessive spending creating inflation and rising federal deficits combined with interest rates rising in an attempt to curb inflation without dealing with the spending.

The article reports:

More companies are declaring bankruptcy and shutting down operations, citing inflation and high costs. Inflation and the economy remains a top issue among all voters, according to a recent The Center Square Voters’ Voice Poll.

Retailers are closing nearly 3,200 stores this year, according to a recent analysis from CoreSight Research. The closures are a 24% increase from 2023.

U.S. drug stores and pharmacy closures led to 8 million square feet of shuttered retail space this year, the research company said. It also notes that retailers are losing inventory and customers due to retail theft. “Retail shrink” is closely connected to “organized retail crime,” it notes.

Out of the 3,200 being closed, the majority are being closed by roughly 30 retailers, with Family Dollar closing the most of over 600, according to the data, CBS News reported.

The article concludes:

One key indicator of economic health is consumer spending, and while it hasn’t yet slowed, warning signs are there because it’s largely being financed by debt, economists have explained. And consumers are also struggling to pay it off, they add. Earlier this year, economist David Rosenberg of Rosenberg Research warned that as total credit card debt reached a new all-time high of $1.13 trillion, credit card and auto loan delinquencies were also up. “As far as consumer credit is concerned, the default cycle isn’t merely looming, it’s arrived,” he wrote in an economic report.

According to a recent The Center Square Voters’ Voice Poll, conducted in conjunction with Noble Predictive Insights, inflation/price increases (45%) and the economy/jobs (24%) are top concerns among voters.

“Inflation is a high-ranking issue among Democrats and Republicans and True Independents,” David Byler of Noble Predictive Insights told The Center Square. “Every political group thinks this matters.”

The rise in retail theft is also a factor in store closings. How much does it cost to put candy behind plastic so that it cannot be stolen? How many extra man hours are needed to help customers access products that are now locked away? These are also things that lead to higher prices and continuing inflation. Curtailing government spending and prosecuting retail theft would be a good first step in lowering prices for consumers.

The Choice Is Between Bad And Awful

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On Wednesday, Armstrong Economics posted an article about inflation and recession.

The article reports:

Federal Reserve Bank of Minneapolis President Neel Kashkari has advised against anticipating near-term rate cuts. While speaking to the Financial Times, the Fed president stated that people would simply prefer a recession to continued inflation.

“I have learned that the American people—and maybe people in Europe equally—really hate high inflation. I mean, really viscerally hate high inflation,” he told the Financial Times’ The Economics Show podcast. Kashkari is speaking as if we are not already in a recession. It is not difficult to understand the “visceral” hatred people around the world feel toward rising prices. The effects of inflation are felt with every purchase, causing the average person to adjust their entire lifestyle.

The article concludes:

Real prices have far surpassed anything they calculate in CPI. Everyone understands that prices have risen far more than the arbitrary number the Fed provides us. Taxes are continually increasing for everyone in every tax bracket. The government not only adds to inflationary issues with their spending but then expects their citizens to foot a portion of the bill with taxes, which will simply never be enough.

Then we have Washington telling the masses to blame corporations for price gouging while raising their taxes and making it increasingly difficult to conduct business and maintain a large workforce. It is not that the people would prefer to be in a recession, the real issue is that countless people are entering survival mode. People everywhere want to hold onto whatever they may have out of fear for the future, but they are unable even to hoard as real prices now demand they hand over whatever they have to maintain their lives.

In a recession, consumer spending drops, and people lose their jobs. A service economy such as the one America currently has is more vulnerable to recession than a manufacturing economy. A recession creates hardship for working families.Inflation impacts both working families and retirees. Either one is a bad deal. The most practical way to deal with inflation in America would be to cut government spending and to resume domestic oil production. Both of those things would help revive a miserable economy.

Economic Growth Has Significantly Slowed

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On Thursday, The Daily Signal posted an article about the revised downward economic growth in the first quarter of 2024. America is not doing well economically.

The article reports:

The U.S. economy grew less than previously thought in the first quarter of 2024 amid a slowdown in consumer spending, the Bureau of Economic Analysis announced Thursday.

Gross domestic product was revised down in the first quarter from 1.6% to 1.3% year-over-year in a sign that the economy is not as strong as initial estimates indicated, according to a release from the BEA. Economists originally expected growth in the first quarter to be around 2.2%, more in line with the above trend growth seen in the third and fourth quarters of 2023, which were 4.9% and 3.4%, respectively.

The revision was due to new information that shows that consumer spending, private inventory investment, and federal government spending were lower than initial estimates, while state and local government spending, nonresidential and residential fixed investment, and exports were slightly greater than original tallies, according to the BEA.

Current-dollar GDP was also revised down to 4.3% from 4.8%, and real gross domestic income totaled just 1.5% in an initial estimate from the BEA.

Consumer spending is down because consumers are being forced to spend more on necessities and less on extras.

The article concludes:

In an attempt to bring inflation back down to around 2%, the Fed has placed its federal funds rate in a range of 5.25% and 5.50%, a 23-year high, which has put pressure on consumers and businesses to slow spending. The hike in the federal funds rate has increased the cost of credit across the board, making it more expensive to take out debt, such as through credit cards.

The cumulative amount of debt held by Americans totaled $17.69 trillion in the first quarter, with $1.12 trillion of that being on credit cards. The share of people who were behind 90 days or more on their credit card payments in the quarter jumped to 10.7%, outdoing the pandemic high of 10% in the first quarter of 2021.

Job growth has also slowed as of late, with the U.S. adding just 175,000 nonfarm payroll jobs in April, far lower than the 242,000 that were expected, while the unemployment rate ticked up slightly to 3.9%. In April, there were fewer gains in government jobs than in previous months, contributing largely to the slowdown, with March adding 303,000 new jobs.

This problem was government-caused and can be government-solved. Cut taxes and cut spending–that is the solution if Congress ever has the integrity to do it.

Good Economic News Created By Good Leadership

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Trading Economics reported the following:

The US trade deficit narrowed to $43.1 billion in November 2019 from a downwardly revised $46.9 billion gap in the previous month. It compares with market expectations of a $43.8 billion shortfall. The trade gap shrank for the third straight month to the lowest since October 2016. Imports slumped 1% to the lowest value in 2 years due to falling purchases of aircraft, computers and cell phones. Exports increased 0.7% to $209 billion, boosted by sales of drilling and oilfield equipment, jewellery, autos, diamonds and aircraft engines. The goods trade deficit with China narrowed 15.7% to $26.4 billion, with imports dropping 9.2% and exports jumping 13.7%. Year-to-date, the total deficit decreased $3.9 billion. The trade war with China seems to be the main cause behind the lowest trade gap. Although a lower trade deficit is likely to impact positively on GDP growth, concerns remain over the impact of falling imports in consumer spending, the largest component of GDP. Balance of Trade in the United States averaged -15090.59 USD Million from 1950 until 2019, reaching an all time high of 1946 USD Million in June of 1975 and a record low of -67823 USD Million in August of 2006.

This is the result of the tariffs and trade negotiations of President Trump.

Economic Indicators In November

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One America News is reporting today that U.S. homebuilding increased more than expected in November and permits for future home construction surged to a 12-1/2-year high.

The article reports:

The economy’s near-term prospects were also bolstered by other data on Tuesday showing a strong rebound in manufacturing production in November as the return of formerly striking General Motors’ <GM.N> workers boosted automobile output. The data suggested the economy remained on a moderate growth path in the fourth quarter despite slowing consumer spending.

…In a separate report on Tuesday, the Fed said manufacturing production rose 1.1% last month after dropping 0.7% in October. Excluding motor vehicles and parts, manufacturing output increased 0.3%.

The rebound in manufacturing production suggests the factory downturn is probably close to running its course. Manufacturing output is still expected to contract in the fourth quarter.

“This is a welcome shift after declines in three out of the four preceding months, but not the end of the struggles for manufacturing,” said Tim Quinlan, a senior economist at Wells Fargo Securities in Charlotte, North Carolina.

Single-family homebuilding, which accounts for the largest share of the housing market, increased 2.4% to a rate of 938,000 units in November, the highest level since January. Single-family housing starts rose in the West and Northeast, but fell in the Midwest and the South.

Single-family housing building permits rose 0.8% to a rate of 918,000 units in November, the highest since July 2007.

Starts for the volatile multi-family housing segment jumped 4.9% to a rate of 427,000 units last month. Permits for the construction of multi-family homes rose 2.5% to a rate of 564,000 units.

The economy is doing very well. The only thing that would make it better would be if the people we elected and sent to Washington would get serious about cutting spending and lowering our national debt.

The Quiet Revolution In American Shopping

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One America News posted an article today about the changing habits of shoppers in America.

The article reports:

U.S. shoppers made more purchases online on Black Friday than in the mall – hurting traffic and sales at brick-and-mortar stores, according to data that offered a glimpse into what is still one of the busiest shopping days of the year.

For the first time in several years, however, store traffic on Thanksgiving evening grew – indicating a shift in when consumers are leaving their homes to shop. It is also a sign of how Thursday evening store openings have continued to hurt what has traditionally been a day that kicked off the U.S. holiday season.

The importance on the shopping calendar of Black Friday, or the day after the U.S. Thanksgiving Day holiday, has waned in recent years. This is due to the choice by many retailers to open their stores on Thursday evening, as well as to early holiday promotions and year-round discounts. However, it is increasingly turning into a day when shoppers do not necessarily flock to stores but spend heavily online.

Also, for most retail chains, Black Friday store traffic and sales data is not necessarily grim as consumers continue to spend, consultants said. Winning the transaction, whether online or in-store, has now become more important for retailers than where it occurs.

Most major stores have followed the example of Amazon, making things available online (with options of in-store pick up). Shoppers can now find an item online, place an order, have it delivered, or go to their local store to pick it up immediately or within a day or two.

The article concludes:

Shopper traffic on Thanksgiving evening increased by 2.3%year-over-year but was dragged down by Black Friday, which fell 6.2% from a year ago.

Brian Field, senior director of global retail consulting for ShopperTrak, said the traditional pattern of shoppers visiting stores has been disrupted not only by online shopping but by offerings like “buy online and pick up in store,” a growing category, which is not included in store traffic count on Black Friday.

“What all of this really boils down to is the customer journey has changed, now it can start anywhere online, in-store and end anywhere … and it is about making sure the customer makes the purchase and stays loyal to the brands more than where it happens,” he said.

Preliminary data from analytics firm RetailNext showed net sales at brick-and-mortar stores on Black Friday fell 1.6%, which the firm said is slower than in previous years. No data was yet available for actual spending in stores.

The National Retail Federation had forecast U.S. holiday retail sales over the two months in 2019 will increase between 3.8% and 4.2% from a year ago, for a total of $727.9 billion to $730.7 billion. That compares with an average annual increase of 3.7% over the past five years.

Consumer spending is a major part of the health of the American economy. The increase in holiday retail sales is part of what keeps our economy growing and thriving.

It’s Hard To Remove A Sitting President When The Economy Is Good

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It is hard to remove a sitting President when the economy is good. That rule applies to attempts to impeach the President, and the rule also applies to elections. One impact of a strong economy is that people who are making good money and feel relatively secure in their jobs are less likely to engage in class warfare. Class warfare is one of the Democrat’s most frequently used weapons.

Yesterday One America News posted an article about the current state of the American economy.

The article reports:

The latest macroeconomic data is suggesting the chances of a U.S. recession have reduced in recent weeks due to steady consumer spending. According to a recent poll by Morning Consult, consumer confidence has rebounded over the past four weeks due to ongoing job creation, gains in wages and a soft price inflation.

Even without a resolution of the trade negotiations with China, consumers are feeling confident.

The article concludes:

Retail sales have also increased going into the holiday shopping season, beating previous expectations. Consumer spending makes up for roughly 70 percent of America’s GDP growth. Many experts have tied the ongoing stable expansion to President Trump’s economic policies.

“I think on the whole, this economy has been remarkable. It’s taken the headwinds of the trade wars pretty successfully…and we’re still chugging along at roughly two percent. I think that’s an accomplishment.” – Douglas Holtz-Eakin, President of the American Action Forum

A separate report from S&P Global found the probability of a U.S. recession in the coming year has dropped from 35 to 30 percent since August of this year.

I personally would like to see the probability of a U.S. recession at 0 percent, but I don’t know if I would trust the media to report that number even if it occurred.

The State Of The Economy

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The Conservative Treehouse posted an article today about the revision of the third quarter economic growth numbers.

The article reports:

More signs the U.S. economy is very strong show up today as several key economic indicators defy prior economist predictions.   Staring with a significant upward revision by the Bureau of Economic Analysis for the third quarter GDP growth from 1.9% to 2.1%:

The revision to GDP reflected upward revisions to inventory investment, business investment, and consumer spending.

The increase in consumer spending reflected increases in both goods (notably recreational goods and vehicles as well as food and beverages) and in services (led by housing and utilities as well as food services). (link)

Additionally, the commerce department released data showing U.S. core capital goods orders increased 1.2% in November, the largest gain since January; and more data on home sales shows a whopping 31.6% increase year-over-year. 

U.S. consumers and home buyers are benefiting from low inflation and significant blue collar wage gains that are an outcome of a growing economy and a very strong jobs market.  The most significant wage growth is in non-supervisory positions.   The economic strength is broad-based and the U.S. middle-class is confident.

We live in a commerce based society. When Americans feel confident about their financial futures and buy things, the economy grows. When Americans stop buying things, the economy shrinks. The economy is cyclical and interdependent. When people are insecure about their financial futures, they take fewer vacations, they go out to dinner less frequently, they go to the movies less frequently, etc. Then the jobs in those economic sectors begin to go away–fewer employees are needed. We saw that in the recession of 1990, which was essentially caused by a tax on luxury goods that Congress told us would affect only the people buying those luxury goods. Well, when people stopped buying luxury goods because they didn’t want to pay the taxes on them, the people making those goods lost their jobs. When those people lost their jobs, they traveled less, ate out less, shopped less, etc. Then the people in those industries were laid off because they were not needed. The pattern here is obvious.

When people feel secure about their future, the economy grows. Recent rumors of recession were not taken seriously because Americans were getting raises and could see that more of their neighbors were working. The economy right now is on a good path. It will take some serious effort to mess it up.

Why I Believe The Media’s Talk Of Recession Is Garbage

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Breitbart posted an article today about September’s jobs numbers. There is a lot of good news in the report.

The article reports:

Economists had expected the economy to between 150,000 and 180,000 with the median consensus at 163,000, according to Econoday. Unemployment was expected to remain unchanged. Last month’s jobs figure was originally reported at 164,000, now revised down to 159,000, and unemployment was 3.7 percent.

Although the headline number was weaker than expected, wage growth was strong in August. Average hourly earnings for all employees on private nonfarm payrolls rose by 11 cents to $28.11, or 0.4 percent, following 9-cent gains in both June and July. Over the past 12 months, average hourly earnings have increased by 3.2 percent. In August, average hourly earnings of private-sector production and nonsupervisory employees rose by 11 cents to $23.59.

Unemployment among African Americans fell to 5.5 percent, the lowest level on record.

The labor force participation rate edged up to 63.2 percent in August, indicating that the strong labor market has continued to draw Americans into the workforce.

The largest job gains came from professional and business services, which added 37,000.  Census hiring boosted the federal government’s hiring to 28,000 workers. Health care added 24,000 to the total while financial services increased by 15,000.

The article concludes:

Consumer spending and the labor market have been strong. Data released Thursday showed worker compensation rising strongly and well-above inflation. Rising labor costs can promote capital investment by businesses seeking to make workers more productive.
With unemployment near 50-year lows, job growth has slowed and many businesses say they are having trouble hiring. Employment growth has averaged 158,000 per month thus far this year, compared with an average monthly gain of 223,000 in 2018.

This is the chart showing the Workforce Participation Rate since 2009 (from the Bureau of Labor Statistics website):

We are not yet up to 2009 levels, but we are moving in the right direction. The economic indicators are positive. Hopefully the American public will be able to see past the media’s efforts to create a recession.

The Latest Economic Numbers

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On Friday, Market Watch reported that the U.S. economy did better than expected during the first three months of 2019.

The article reports:

Reports of the demise of the U.S. economy proved unfounded as first-quarter activity showed surprising strength. The U.S. economy expanded at a 3.2% annual pace in the first three months of 2019, the government said Friday.

The gain was well above forecasts. Economists polled by MarketWatch had forecast a 2.3% increase in gross domestic product. The economy grew at a 2.2% rate in the final three months of 2018.

Inflation moderated a bit in the first quarter.

The article includes other good economic news:

Final sales to domestic purchasers, which excludes trade and inventory behavior, rose 2.3% in the first quarter, the smallest gain in three years, but still well above what economists were expecting.

The value of inventories increased to $128.4 billion from $96.8 billion, adding to GDP.

The trade sector added a little more than 1% to growth in the first quarter. Exports rose 3.7%, while imports dropped by the same amount, leading to a smaller trade deficit.

Offsetting these gains, consumer spending decelerated to a 1.2% gain, the slowest increase in a year.

Business fixed investment decelerated to a relatively slow 2.7% gain, down from a 5.4% gain in the prior quarter. Investment in structures fell 0.8%, the third straight decline.

Investment in new housing was another weak spot. Residential investment dropped 2.8%, the fifth straight quarterly decline.

I believe that the weakness in the housing market is being caused by a number of things. The millennials, the generation that would currently be entering the housing market, are weighed down by student debt. There is also a different attitude among young Americans about owning a house that there was a few generations ago. In the past, many Americans looked at their home as an investment–something that would grow in value over the years. Many older people began with a ‘starter house’–a small house that allowed them to enter into the housing market. Today, couples are having children later than previous generations. Their first house is paid for by two incomes, and they are not dealing with the expense of having children. The concept of a ‘starter house’ is no longer with us. Those facts, along with the price of the home most young people want to own are working to slow down the housing market. I am not convinced any of those factors are going to change.

Time For A Change Of Economic Policy

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This is a chart from today’s Wall Street Journal:

The article reports:

Gross domestic product, the broadest measure of goods and services produced across the economy, contracted at a seasonally adjusted annual rate of 2.9% in the first three months of the year, according to the Commerce Department‘s third reading released Wednesday. That was the fastest rate of decline since the first quarter of 2009, when output fell 5.4%, and matches the average pace of declines during the recession.

“GDP was recession-like in the first quarter, although most other data clearly signal that the decline is an outlier,” said Jim O’ Sullivan, economist at High Frequency Economics.

In its third GDP reading, based on newly available data, Commerce said first-quarter consumer spending and exports were even weaker than previously estimated. Consumer spending growth was lowered to 1% from 3.1% previously, largely because health-care spending was weaker than previously estimated.

President Obama has been in office since 2009. His economic policies have been in place for more than five years. It is becoming obvious that those policies have not been effective in reviving the American economy. It is time to send people to Washington who have new ideas that will encourage small business growth and turn the American economy around.

The Economic Recovery In One Graph

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Today’s Wall Street Journal posted a story about the latest Gross Domestic Product numbers. The article included the following graph:

The Wall Street Journal reported that the Gross Domestic Product grew at a seasonally adjusted annual rate of 0.1% in the first quarter of 2014.

The article in the Wall Street Journal explains some of the factors responsible for the low economic growth. Some suggested causes were the extremely cold winter which slowed consumer spending, and the sudden drop in exports, declining at a 7.6% pace in the first quarter.

Obviously, this is not the robust economy the President has been claiming.

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At Some Point, Even Low-Information Voters Will Laugh At These Reports

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Ed Morrissey at Hot Air posted an article today about recent economic growth in America. The Bureau of Economic Analysis claimed a moderate economic annualized growth rate of 3.2% last month. The Bureau has now adjusted its numbers, saying that the economy only grew at the stagnation level of 2.4%:

The article reports the following from the Bureau of Economic Analysis:

The GDP estimate released today is based on more complete source data than were available for the “advance” estimate issued last month. In the advance estimate, the increase in real GDP was 3.2 percent. With this second estimate for the fourth quarter, an increase in personal consumption expenditures (PCE) was smaller than previously estimated.

Reuters reports the following:

Consumer spending was cut to a 2.6 percent rate, still the fastest pace since the first quarter of 2012. It had previously been reported to have grown at a 3.3 percent pace. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, contributed 1.73 percentage points to GDP growth, down from the previously reported 2.26 percentage points.

As a result, final domestic demand was lowered two-tenths of a percentage point to a 1.2 percent rate. The loss of momentum appears to have spilled over into in the first quarter of 2014, with an unusually cold winter weighing on retail sales, home building and sales, hiring and industrial production.

The article at Hot Air concludes:

Weather will be a factor in 2014 Q1, but it wasn’t in 2013 Q4. The economy was stagnating well before the polar vortices arrived, and has been ever since the June 2009 technical recovery. This is just more of the same.

President Obama’s economic policies are not working. Can we please try something else?

 

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