The initial estimate on economic growth in the third quarter -- July, August, and September -- was an underwhelming 2 percent. Since then, the numbers have been revised up, and then revised up again.
The U.S. economy grew more quickly than previously stated in the July-to-September quarter due to stronger trade, faster health-care spending and increased local government construction, the Commerce Department estimated Thursday. The Commerce Department said third-quarter gross domestic product grew at a seasonally adjusted annual rate of 3.1% in the third quarter.... Economists polled by MarketWatch had anticipated a 2.9% reading in the third and final estimate.
For context, note that the 3.1 percent GDP figure is the best since the end of 2011, and the second best quarter of the last three years. It's short of what most would consider a "robust" recovery, but it's nevertheless heartening.
As for the politics, to reiterate a point from last month, the conventional wisdom suggests President Obama won a second term in spite of a struggling economy, but in light of the stronger growth shortly before the election, it may be time to consider whether Obama prevailed because of an improving economy.
Above, you'll find a chart showing GDP numbers by quarter since the Great Recession began. The red columns show the economy under the Bush administration; the blue columns show the economy under the Obama administration.
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...the conventional wisdom suggests President Obama won a second term in spite of
a struggling economyA deluge of dark-money -funded lies from the Right, but in light of the stronger growth shortly before the election, it may be time to consider whether Obama prevailed becauseof an improving economyVoters saw through the bullsh!t.And cue the bitter folks in 3...2..1..
Yes Rachel, he won because of this and also because people like the guy, and trust him. Romney was not trusted or liked very well. Also the Republican party is so behind the times, and only reach a certain percent and half of those, "crazies"!
This is going to give the GOP screaming nightmares. They sooooooo wanted the economy to tank. Sorry, guys.
Right. Because you know how much Republicans hate making money.
Right. Because you know how much Republicans hate poor people making money.
Fixed that for you.
Why in the world would Republicans hate poor people making money?
I dunno - It's a mystery to me, too.
Shooter
The Republicans, at least the ones with large financial stakes in politics in recent years, have been concentrating on:
All of these measures transfer cost to the un-very wealthy and reduce the economic prosperity of the middle class. The super rich have been able to make the rules, resulting in the transfer of wealth from the middle class to the wealthy during the past 12 years.
I suppose you are one of the middle class Republicans who go along with the boneheaded economic plan to fix our financial woes by putting more money into the pockets of the "job creators." That is absurd. People hire people because those new employees will make them money. Anyone who hires anyone other than a family member just because they have some extra money in their pocket is a fool. The economy just does not work that way.
Yes people are hired that will produce more money, which is why producers move their business offshore rather than hire people here. If you want labor here to be so much more expensive than elsewhere that's fine, but don't then complain about unemployment. Meanwhile the very wealthy pay a very large amount of the income tax burden, and Govt stimulus is a waste of money. It doesn't work.
Republicans would love to have poor people make more money. But that requires a competitive market. You don't have a problem with Republicans you have a problem with countries that are more business friendly than the US.
Shooter
The Republicans' version of the free market that you support only makes you a lackey for the very rich. The Republicans like the free market as long as they can get tax breaks for being in business.
Follow the news whenever a large corporation makes a public decision about where to locate a new factory or corporate headquarters. State and local governments are forced into a bidding war over who can provide the biggest tax breaks and other bribes in order to gain favor with your corporate giant.
Large oil companies get huge tax write-offs to drill for oil. Oil is $100 per barrel ..... you don't think that is incentive to drill.
Your statement that the "stimulus doesn't work" only means that not only are you a water carrier for the rich and famous, you are also uninformed. Economic stimulus was the way out of the Great Depression and was also the way out of the Great Recession. Unfortunately the Republicans prevented a large enough stimulus and additional stimulus measures to allow a more rapid recovery.
Yes, Republicans and especially Democrats love tax breaks. That way they make more money, which is the whole point of being in business. If Govts don't care if business goes to their state they don't have to offer any incentives. Of course that means they also don't care about jobs.
Yes, economic stimulus got us out of the Great Depression. Are you willing to start WW3 to fix an anti-business atmosphere, like FDR did with WW2? Perhaps you should consider this about spending/borrowing. We will never pay back any of the $16 Billion we owe. Do you think that's an appropriate attitude for Govt?
Shooter
You claim that FDR started WWII. That means that you are so brainwashed by the far-right history revisionists like Glenn Beck that you can't participate in a rational conversation. You are not much different than the Southern history revisionists who want to redefine the slave trade as "triangular trade" and blame the Civil War on Northern aggression and a noble defense of states' rights.
Not a problem, I'll stipulate FDR didn't start WW2. Regardless, WW2 is what finished the Great Depression, not stimulus programs.
The government was spending lots of money in the private sector, which created jobs. They did not specifically call it an economic stimulus, but economic stimulus is exactly what it was. The economy is "stimulated" by government spending whether that spending is on building tanks or building bridges. Therefore, WWII was an economic stimulus program. QED
You're assuming that spending alone is what cured the depression. But let's assume you're right. Here we have a chart showing relative spending. All those peaks are big wars. Ergo the only way to get WW2 style spending is WW3. http://www.ritholtz.com/blog/wp-content/uploads/2011/07/outlays-GDP.png
Moreover, I can find you countries like Greece where the percentage of GOvt spending to GDP is even higher than our war spending. Obviously spending alone isn't the solution. http://www.oecd-ilibrary.org/sites/gov_glance-2011-en/images/graphics/giii-4-01.gif
Lastly, what exactly is stimulus supposed to stimulate? Business. Business is the economy, it's the ultimate source of jobs and tax revenue. So instead of paying people to dig ditches, why not make the US business friendly? No new profits means no new jobs and no new tax revenue.
re: your para 1 - There is no "assumption" about Federal deficit spending curing the Depression, it's a fact. Nor is there any requirement that Federal deficit spending be only limited to wartime. An excellent example are the two Eisenhower administrations. You look it up.
re: your para 2 - You're quite right, "spending alone" wasn't and isn't the cause of Greece's problems - not having a sovereign currency is the cause and, as we do have a sovereign currency, your argument is, amazingly enough, false.
re: your para 3 - You're resorting to strawmen again (shocking, I know!). Try looking up the original meaning of the word "economy" - it still applies.
I must admit, you do serve a purpose here, although I don't think it's what your aim is. Every false, misleading and Luntz-focused post you provide, simply means we have to find the facts to refute that which you claim "supports" your arguments.
Keeps us on our toes, donchaknow?
Thanks.
I did look it up and provided you with a chart. Did you just not see it? Eisenhower spent less than Obama.
OK fine then use Iceland or Great Britain they spend way more than we do, have their own currency, and Iceland busted and England is on the way. Of course if you had looked at my cite, you might have noticed that.
Business drives the economy. It is the source of economic wealth, as in goods and services. And it remains that the whole point of stimulus is stimulate business.
You're welcome.
and what would it be if the GOP weren't committing ECONOMIC TREASON against this country at every turn?
That is an excellent term for it.
Economic treason? Hate speech becomes you.
You must be a Repueb you don't make any sense.
Regardless of who won the election, who benefits most from this type of economic growth? If wages are not growing and people are spending with credit, nothing is changing. http://www.facebook.com/at10us?ref=hl
I love it when that happens (ie. all the above)!
Question...Faster health care spending? That doesn't sound good for Obamacare. If more was spent on health care, are costs of health care rising? Increased local government construction. That is tax dollars at work, not private sector expansion. Do we actually call that a plus? Or are tax payers on the hook for more? Not sure. If it is mostly government spending, and health care costs, we have to think about this type of growth. More trade is a real plus.
rethugs are still trying to tank the economy with their insistence that they will take us over the cliff if they don't get those tax breaks left in place for millionaires. They are also doing their very VERY best to smear Hillary Clinton over Benghazi ( wait...how many people were killed on 9/11 under Bush? ) because they fear her in 2016 and they want to put her out of it even before she decides to run. So far it's not working.
Encouraging news for year's end.
If Benghazi is their main talking point that is not enough to bring Hillary Clinton down from being the next President of the United States of America. Run Baby Run!
Rachel Maddow should address that investment in the non-human factor (human-intelligent machines, super-automation, robotics, biobots, digital computerized operations, etc) is the reason economic growth occurs––the result of technological innovation and invention. Our focus should therefore be OWNERSHIP in FUTURE productive capital assets as private sector job creation in numbers that match the pool of people willing and able to work is constantly being eroded by physical productive capital’s ever increasing role.
There’s nothing new about machines replacing people, but the rate of replacement is exponential and the result is that productivity gains lead to more wealth for the OWNERS of the non-human factor of production, but for others who have always been dependent on jobs as their source of income, there has been a steady decline to poverty-level labor incomes.
Chris Matthews, host of MSNBC’s Hardball, recently ruminated on air about ubiquitous automated kiosks as well as the replacement of “seven or eight cameramen” on his program with machines. “Everywhere we go, it’s robots,” he said.
“The era we’re in is one in which the scope of tasks that can be automated is increasing rapidly, and in areas where we used to think those were our best skills, things that require thinking,” says David Autor, a labor economist at Massachusetts Institute of Technology.
Businesses are spending more on technology now because they spent so little during the recession. Yet total capital expenditures are still barely running ahead of replacement costs. “Most of the investment we’re seeing is simply replacing worn-out stuff,” says economist Paul Ashworth of Capital Economics.
Yet, while the problem is one that no one can no longer ignore, the solution also is one starring them in the face but they just can't see the simplicity of it.
None of this is new from a macro-economic viewpoint as productive capital is increasingly the source of the world’s economic growth. The role of physical productive capital is to do ever more of the work, which produces income. Full employment is not an objective of businesses. Companies strive to keep labor input and other costs at a minimum. Private sector job creation in numbers that match the pool of people willing and able to work is constantly being eroded by physical productive capital’s ever increasing role. Over the past century there has been an ever-accelerating shift to productive capital––which reflects tectonic shifts in the technologies of production. The mixture of labor worker input and capital worker input has been rapidly changing at an exponential rate of increase for over 235 years in step with the Industrial Revolution (starting in 1776) and had even been changing long before that with man’s discovery of the first tools, but at a much slower rate. Up until the close of the nineteenth century, the United States remained a working democracy, with the production of products and services dependent on labor worker input. When the American Industrial Revolution began and subsequent technological advance amplified the productive power of non-human capital, plutocratic finance channeled its ownership into fewer and fewer hands, as we continue to witness today with government by the wealthy evidenced at all levels.
People invented tools to reduce toil, enable otherwise impossible production, create new highly automated industries, and significantly change the way in which products and services are produced from labor intensive to capital intensive––the core function of technological invention. Binary economist Louis Kelso attributed most changes in the productive capacity of the world since the beginning of the Industrial Revolution to technological improvements in our capital assets, and a relatively diminishing proportion to human labor. Capital, in Kelso’s terms, does not “enhance” labor productivity (labor’s ability to produce economic goods). In fact, the opposite is true. It makes many forms of labor unnecessary. Because of this undeniable fact, Kelso asserted that, “free-market forces no longer establish the ‘value’ of labor. Instead, the price of labor is artificially elevated by government through minimum wage legislation, overtime laws, and collective bargaining legislation or by government employment and government subsidization of private employment solely to increase consumer income.”
Furthermore, according to Kelso, productive capital is increasingly the source of the world’s economic growth and, therefore, should become the source of added property ownership incomes for all. Kelso postulated that if both labor and capital are interdependent factors of production, and if capital’s proportionate contributions are increasing relative to that of labor, then equality of opportunity and economic justice demands that the right to property (and access to the means of acquiring and possessing property) must in justice be extended to all. Yet, sadly, the American people and its leaders still pretend to believe that labor is becoming more productive.
The solution is obvious but our leaders, academia, conventional economist and the media are oblivious to the necessity to broaden ownership in the new capital formation of the future simultaneously with the growth of the economy, which then becomes self-propelled as increasingly more Americans accumulate ownership shares and earn a new source of dividend income derived from their capital ownership in the "machines" that are replacing them or devaluing their labor value.
The solution will require the reform of the Federal Reserve Bank to create new owners of future productive capital investment in businesses simultaneously with the growth of the economy. The solution to broadening private, individual ownership of America's future capital wealth requires that the Federal Reserve stop monetizing unproductive debt, including bailouts of banks "too big to fail" and Wall Street derivatives speculators, and begin creating an asset-backed currency that could enable every man, woman and child to establish a Capital Homestead Account or "CHA" (a super-IRA or asset tax-shelter for citizens) at their local bank to acquire a growing dividend-bearing stock portfolio to supplement their incomes from work and all other sources of income. Policies need to insert American citizens into the low or no-interest investment money loop to enable non- and undercapitalized Americans, including the working class and poor, to build wealth and become "customers with money." The proposed Capital Homestead Act would produce this result.
Support the Capital Homestead Act athttp://www.cesj.org/homestead/index.htm andhttp://www.cesj.org/homestead/summary-cha.htm
Sign the Petition at http://signon.org/sign/reform-the-federal-reserve.fb23?source=c.fb&r_by=3904687
Sign the WhiteHouse.gov petition athttps://petitions.whitehouse.gov/petition/reform-federal-reserve/PhY3Jswk
This is good news, but it's not good enough, I'm afraid.
In the 50's and 60's, we had GDP growth rates that averaged 4.1%-4.4%, respectively. GDP growth has never averaged that high ever since.
What did we do to create this kind of growth? Top marginal tax rates (income taxes on the rich) were 70%-92%, corporate income taxes were 50%, and capital gains taxes were 25%. Did I mention that unionization rates were 35% (they're 9% now), and the minimum wage was going up nearly every year?
In fact, when you adjust it for inflation, when the value of the minimum wage was the highest, unemployment rates were the lowest they had ever been in the 20th century! Unemployment reached a low of 2.7% when the value of the minimum wage was (adjusted for today's dollars) over $10 an hour!
Here, we're only seeing GDP growth of just 2% for most quarters. :/
You keep calling this the Great Recession. It is the Bush Depression. At least, get the nomenclature right.
If 99.99% of us acted so ineptly at our job as so many Congressmen do, we would be FIRED and escorted out the door without delay!
Where is the IMPEACH CONGRESS MOVEMENT?