Economic Impact of Hurricane Sandy

http://money.cnn.com/2012/10/30/news/economy/sandy-economic-impact/index.html?

History of recessions

http://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States

GDP growth by state, 2011

http://www.bea.gov/newsreleases/regional/gdp_state/gsp_newsrelease.htm

Elections and economic indicators - excellent maps

Press on the button just above the map to change topic, and pick a state from drop-down menu on the right

http://www.pbs.org/newshour/vote2012/map/unemployment.html

3rd quarter GDP numbers

Increase: 2% annual rate, above expectation of 1.5%


Comments:

• Government spending increases most in two years
• Business spending falling; await fiscal cliff resolution
• Housing purchases increase

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 2.0 percent in the third quarter of 2012 (that is, from the second quarter to the third quarter), according to the "advance" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 1.3 percent. 

The increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures (PCE), federal government spending, and residential fixed investment that were partly offset by negative contributions from exports, nonresidential fixed investment, and private inventory investment. Imports, which are a subtraction in the calculation of GDP, decreased.

The acceleration in real GDP in the third quarter primarily reflected an upturn in federal government spending, a downturn in imports, an acceleration in PCE, a smaller decrease in private inventory investment, an acceleration in residential fixed investment, and a smaller decrease in state and local government spending that were partly offset by downturns in exports and in nonresidential fixed investment.
Read more at http://www.calculatedriskblog.com/2012/10/real-gdp-increased-20-annual-rate-in-q3.html#6hOy5wiSRpoW9MmD.99 


http://www.calculatedriskblog.com/2012/10/real-gdp-increased-20-annual-rate-in-q3.html

====================

Comprehensive discussion: http://www.ritholtz.com/blog/2012/10/gdp-better-thx-to-defense-spending/

GDP better thx to defense spending

 

By Peter Boockvar - October 26th, 2012, 8:13AM

GDP in Q3 rose 2.0%, better than expectations of 1.8% and an improvement from the 1.3% rise in Q2. Nominal GDP was up by 4.8%, well above the estimate of 3.9% as the Price Deflator was up by 2.8%, the 2nd most gain since Q3 ’08 and higher than the forecast of 2.1%. Personal Spending was up by 2%, actually a touch less than expected. Gross Private Investment was up by .5%, below the gain seen in Q2 as spending on equipment and software was flat after solid gains in previous quarters. Residential construction picked up some of that slack with a 14.4% rise. Trade was a modest drag as exports fell 1.6% while imports were lower by just .2%. Federal Government spending looks like the main driver of the better than expected headline print as it rose by 3.7% led by a 13% gain in defense spending. Spending at the state and local level fell by a .1%. Inventories were a tiny drag as they rose less than the gain seen in Q2. Real final sales, taking out the inventory influence, rose by 2.1% vs 1.7% in Q2 and 2.4% in Q1. Bottom line, 2% growth is about in line with the average seen over the past three years of 2.1% but the deceleration in trend is evident as the economy grew 2.4% in ’10, 1.8% in ’11 and averaging 1.8% in ’12. Mathematically, GDP should grow at population growth + productivity. Population is growing by 1% and productivity just 1% vs the 30 yr average productivity growth of 2.2%. We need more savings and investment for this, not more borrowing and spending pushed by gov’t monetary and fiscal policy.

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http://global.econoday.com/byshoweventfull.asp?fid=451307&cust=global-premium&year=2012&lid=0#top

2012 Economic Calendar

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Resource Center »  U.S. & Intl Recaps   |   Event Release Dates   |   Event Definitions   |   Today's Calendar

United States : GDP Released On 10/26/2012 8:30:00 AM For Q3a:2012 Prior Consensus Consensus Range Actual Real GDP - Q/Q change - SAAR 1.3 % 1.9 % 1.0 % to 3.9 % 2.0 % GDP price index - Q/Q change - SAAR 1.6 % 2.0 % 1.4 % to 2.7 % 2.8 % Market Consensus before announcement GDP growth was unexpectedly revised down for the second quarter. The Commerce Department estimated growth at a mere 1.3 percent annualized pace, compared to the second estimate of 1.7 percent and advance estimate of 1.5 percent. The latest number was sharply slower than the 2.0 percent seen in the first quarter and especially the 4.1 percent boost posted for the fourth quarter of last year. Definition Gross Domestic Product (GDP) is the broadest measure of aggregate economic activity and encompasses every sector of the economy. Real GDP growth is always quoted at a quarterly annual rate. It measures how much the economy has grown over a three-month period. Quarterly growth rates are often volatile; consequently, economists also like to look at the year-over-year growth in GDP. The yearly changes tend to be more stable. Data Source: Haver Analytics It is common to compare quarterly changes at annual rates in the GDP deflator. These can be volatile, just like the quarterly swings in real GDP growth; as a result, the trend in inflation is better determined by year- over- year changes. Data Source: Haver Analytics 2012 Release Schedule Released On: 1/27 2/29 3/29 4/27 5/31 6/28 7/27 8/29 9/27 10/26 11/29 12/20 Release For: Q4a: Q4p: Q4f: Q1a: Q1p: Q1f: Q2a: Q2p: Q2f: Q3a: Q3p: Q3f: A: Advance P: Preliminary F: Final ===================================== Another commentary http://www.ritholtz.com/blog/2012/10/a-closer-look-gdp-data/ A Closer Look GDP Data   By Barry Ritholtz - October 26th, 2012, 12:15PM Adventures in confirmation bias: The GDP data this morning was a deep sigh of relief for those people who fear a recession may be coming. I don’t have that sense of relief. Perhaps its my own bias, but the details of the GDP report reveal not an organic growth period in a healthy recovering economy, but rather a tepid post-credit crisis expansion highly dependent on government largesse and Federal Reserve accommodation. It is about what we should expect: Below-trend growth, as the economy gradually heals, individual and bank balance sheets slowly improve, and the excesses of the prior cycle get wrung out of the system. Consider the major factors within this GDP report: -Residential construction rose 14.4%. Housing is a bright spot; with sales and prices increasing.  However, this has been artificially goosed by the Fed’s ultra low rates and purchases MBS. Mortgage rates are at their lowest levels since WW2, and foreclosure abatements have created an appearance of reduced distress sales. So this portion of GDP is positive but artificial; it added about 0.3% to GDP. -Defense Spending rose by 13% — this added 0.6% to GDP.  This is not what we want driving GDP, but rather, Ii prefer to see private sector improvements. -Business Spending remains soft. Ignore the nonsensical “Uncertainty” trope; if demand were there, businesses would add personnel and make CapEx investments as necessary. (idiotic rationalizations spoon fed to the gullible do not count as intelligent economic analysis to me — and that includes “uncertainty”). -Slowing Exports (down 1.6%) took a few bips off of GDP. -Midwestern Drought I do recognize that the probably whacked almost half a percentage point from overall GDP numbers (0.1% times 4Qs for an annualized 0.4%). By my numbers, half of the GDP gains came from Fed/Uncle Sam. The slowdown in Europe and Asia are pressuring economic activity; the drought took away some of the gains, and without that, we should have seen some more strength. Overall, this report suggests that we are not yet in recession, yet, but are barely above stall speed — more like a 1.5% GDP ex-government interventions and drought. The improvements we are seeing seem to be driven mostly by Fed and government intervention. The key question, in light of the mediocre earnings season, is how long the propping up can continue. Sources: GROSS DOMESTIC PRODUCT: THIRD QUARTER 2012 (ADVANCE ESTIMATE) BEA, October 25, 2012 http://www.bea.gov/newsreleases/national/gdp/2012/pdf/gdp3q12_adv.pdf PERMALINK Category: Economy, Federal Reserve. -------------------------------- Another look:  http://www.calculatedriskblog.com/2012/10/comments-on-q3-gdp-and-investment.html Comments on Q3 GDP and Investment by Bill McBride on 10/26/2012 12:15:00 PM The Q3 GDP report was weak, with 2.0% annualized real GDP growth, but slightly better than expected. Final demand increased in Q3 as personal consumption expenditures increased at a 2.0% annual rate (up from 1.5% in Q2), and residential investment increased at a 14.4% annual rate (up from 8.5% in Q2). Investment in equipment and software was flat in Q3, and investment in non-residential structures was negative.   However, it appears the drag from state and local governments will end soon (after declining for 3 years). Overall this was another weak report indicating sluggish growth. The following graph shows the contribution to GDP from residential investment, equipment and software, and nonresidential structures (3 quarter centered average). This is important to follow because residential investment tends to lead the economy, equipment and software is generally coincident, and nonresidential structure investment trails the economy. For the following graph, red is residential, green is equipment and software, and blue is investment in non-residential structures. So the usual pattern - both into and out of recessions is - red, green, blue. The dashed gray line is the contribution from the change in private inventories. Click on graph for larger image. Residential Investment (RI) made a positive contribution to GDP in Q3 for the sixth consecutive quarter. Usually residential investment leads the economy, but that didn't happen this time because of the huge overhang of existing inventory, but now RI is contributing. The good news: Residential investment has clearly bottomed. The contribution from RI will probably continue to be sluggish compared to previous recoveries, but the ongoing positive contribution to GDP is a significant story. Equipment and software investment was unchanged in Q3 (compared to Q2). This followed twelve consecutive quarters with a positive contribution. The contribution from nonresidential investment in structures was negative in Q3. Nonresidential investment in structures typically lags the recovery, however investment in energy and power has masked the ongoing weakness in office, mall and hotel investment (the underlying details will be released next week). The second graph shows the contribution to percent change in GDP for residential investment and state and local governments since 2005. The blue bars are for residential investment (RI), and RI was a significant drag on GDP for several years. Now RI has added to GDP growth for the last 6 quarters (through Q3 2012). However the drag from state and local governments is ongoing, although the drag in Q3 was very small. State and local governments have been a drag on GDP for twelve consecutive quarters. Although not as large a negative as the worst of the housing bust (and much smaller spillover effects), this decline has been relentless and unprecedented. The good news is the drag appears to be ending. In real terms, state and local government spending is now back to 2001 levels, even with a larger population. Residential Investment as a percent of GDP is up from the record lows during the housing bust. Usually RI bounces back quickly following a recession, but this time there is a wide bottom because of the excess supply of existing vacant housing units. Last year the increase in RI was mostly from multifamily and home improvement investment. Now the increase is from most categories including single family. I'll break down Residential Investment (RI) into components after the GDP details are released this coming week. Note: Residential investment (RI) includes new single family structures, multifamily structures, home improvement, broker's commissions, and a few minor categories. The last graph shows non-residential investment in structures and equipment and software. I'll add details for investment in offices, malls and hotels next week. The key story is that residential investment is continuing to increase, and I expect this to continue (although the recovery in RI will be sluggish compared to previous recoveries). Since RI is the best leading indicator for the economy, this suggests no recession this year or in 2013 (with the usual caveats about Europe and policy errors in the US). Earlier with revision graphs: • Real GDP increased 2.0% annual rate in Q3 Read more at http://www.calculatedriskblog.com/2012/10/comments-on-q3-gdp-and-investment.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+CalculatedRisk+%28Calculated+Risk%29#KdtcmucAZ1v3zsOX.99

Third presidential debate - fact check

http://elections.nytimes.com/2012/debates/presidential/2012-10-22?smid=tw-nytimes#fact-checks

http://m.yahoo.com/w/legobpengine/news/fact-check-flunking-geography-history-033954434--election.html?orig_host_hdr=news.yahoo.com&.intl=US&.lang=en-US

Update on the housing market

http://mam.econoday.com/byshoweventfull.asp?fid=451343&cust=mam&year=2012&lid=0

Housing Starts

Released On 10/17/2012 8:30:00 AM For Sep, 2012 Prior Prior Revised Consensus Consensus Range Actual Starts - Level - SAAR 0.750 M 0.758 M 0.765 M 0.745 M to 0.785 M 0.872 M Permits - Level - SAAR 0.803 M 0.801 M 0.810 M 0.799 M to 0.843 M 0.894 M

Highlights The housing sector is showing somewhat stronger-than-expected health with both starts and permits gaining in the latest report. The September starts pace of 0.872 million units topped market expectations of 0.765 million and was up 34.8 percent on a year-ago basis. The latest increase was led by the multifamily component which jumped 25.1 percent, following a 3.2 percent dip in August. However, the single-family component also improved, gaining a notable 11.0 percent in September after a 7.3 percent increase the prior month. By region, starts in September were led by a 20.1 percent boost in the West Census region, followed by the South with a 19.9 percent increase. The Midwest also rose with a 6.7 percent boost. The Northeast dipped 5.1 percent. Along with the recent gains in the NAHB housing index measure, homebuilders are showing moderate optimism with permits paid for. Housing permits jumped 11.6 percent in September to an annualized pace of 0.894 million, which was up 45.1 percent on a year-ago basis. Analysts forecast 0.810 million units. On the news, equity futures rose slightly. Housing clearly is now taking the lead for the recovery as manufacturing has softened due to weakness in Europe and Asia. The Fed's Operation Twist is gradually paying off with lower mortgage rates slowly bringing demand back up. The news is good but still from a low baseline.

Market Consensus before announcement Housing starts in August advanced 2.3 percent following a 2.8 percent slip in July. The August starts pace of 0.750 million units was up 29.1 percent on a year-ago basis. For the latest month, the increase in starts was led by the single-family component which gained 5.5 percent after a 4.5 percent decline in July. Housing permits eased in August after a moderately healthy July. Permits fell back 1.0 percent after a 6.7 percent rebound in July.

Definition A housing start is registered at the start of construction of a new building intended primarily as a residential building. The start of construction is defined as the beginning of excavation of the foundation for the building.  Why Investors Care

Monthly figures are often volatile; housing starts fluctuate more than many indicators. It takes several months for total housing starts to establish a trend. Consequently, we have depicted total starts relative to a five month moving average. Data Source: Haver Analytics

http://bcshort.files.wordpress.com/2010/09/us-housing-prices.jpg

More recent graph from the website: http://scottgrannis.blogspot.com/2012/10/the-reluctant-recovery-part-4.html

Historical recessions

http://randallparker.blogspot.com/2012/10/neat-graphs-on-recessions-and-recoveries.html

The 2007-2009 recession officially ended in June of 2009 (the second quarter). How bad was this recession, and how quickly is the economy recovering? How does this recession and recovery compare to previous cycles?

• Compare Recessions &
  Recoveries
• Length of Recessions
• Depth of Recessions

Select individual recessions to compare.

JPG version
View Data

Notes:

1. Employment is nonfarm payroll employment calculated by the Bureau of Labor Statistics.
2. Open data table for data on individual recessions and recoveries.
3. *The NBER determined that the 2007 recession ended in June 2009 (the second quarter).

Select individual recessions to compare.

JPG version
View Data

Notes:

1. Output is gross domestic product adjusted for inflation as calculated by the Bureau of Economic Analysis.
2. Open data table for data on individual recessions and recoveries.
3. *The NBER determined that the 2007 recession ended in June 2009 (the second quarter).

Background on Recession/Recovery in Perspective

This page places the current economic downturn and recovery into historical (post-WWII) perspective. It compares output and employment changes from the 2007-2009 recession and subsequent recovery with the same data for the 10 previous recessions and recoveries that have occurred since 1946.

This page provides a current assessment of 'how bad' the 2007-2009 recession was relative to past recessions, and of how quickly the economy is recovering relative to past recoveries. It will continue to be updated as new data are released. This page does not provide forecasts, and the information should not be interpreted as such.

The charts provide information about the length and depth of recessions, and the robustness of recoveries.

Post-WWII Recessions

The Business Cycle Dating Committee of the National Bureau of Economic Research determines the beginning and ending dates of U.S. recessions. http://www.nber.org/cycles.html

It has determined that the U.S. economy experienced 10 recessions from 1946 through 2006. The committee determined that the 2007-2009 recession began in December 2007 and ended in June of 2009. Ending dates are typically announced several months after the recession officially ends. Read the June 2009 trough announcement by the NBER. 

Length of Recessions

The 10 previous postwar recessions ranged in length from 6 months to 16 months, averaging about 10 1/2 months. The 2007-09 recession was the longest recession in the postwar period, at 18 months.

Depth of Recessions

The severity of a recession is determined in part by its length; perhaps even more important is the magnitude of the decline in economic activity. The 2007-09 recession was the deepest recession in the postwar period; at their lowest points employment fell by 6.3 percent and output fell by 5.1 percent.

Debate factcheck - selected

http://latino.foxnews.com/latino/politics/2012/10/17/debate-fact-check-stumbles-in-latest-presidential-debate/

Topic: Gas Prices

ROMNEY: "The proof of whether a strategy is working or not is what the price is that you're paying at the pump. If you're paying less than you paid a year or two ago, why, then, the strategy is working. But you're paying more. When the president took office, the price of gasoline here in Nassau County was about $1.86 a gallon. Now, it's $4 a gallon. The price of electricity is up. If the president's energy policies are working, you're going to see the cost of energy come down."

THE FACTS: Presidents have almost no effect on energy prices; most are set on financial exchanges around the world. When Obama took office, the world was in the grip of a financial crisis and crude prices — and gasoline prices along with them — had plummeted because world demand had collapsed. Crude oil prices have since risen even as U.S. oil production has soared in recent years because global demand is reaching new heights as the developing economies of Asia use more oil.

Other energy prices have fallen during Obama's term. Electricity prices, when adjusted for inflation, are down, and homeowners are finding it much cheaper to heat their homes with natural gas. That's because natural gas production has surged, reducing prices both for homeowners and for utilities that burn gas to generate electricity.

Read more: http://latino.foxnews.com/latino/politics/2012/10/17/debate-fact-check-stumbles-in-latest-presidential-debate/#ixzz29YuE57z4

Topic: Taxes

OBAMA: "What I've also said is, for (those earning) above $250,000, we can go back to the tax rates we had when Bill Clinton was president."

THE FACTS: Not exactly. The Bush tax cuts set the top income rate at 35 percent. Under Obama's proposal to raise taxes on households earning more than $250,000, the president would return the top rate to the 39.6 percent set during the Clinton administration. But he neglected to mention that his health care law includes a new 0.9 percent Medicare surcharge on households earning over that amount — and that tax would be retained. The health care law also imposes a 3.8 percent tax on investment income for high earners. So tax rates would be higher for the wealthiest Americans than they were under Clinton.

Read more: http://latino.foxnews.com/latino/politics/2012/10/17/debate-fact-check-stumbles-in-latest-presidential-debate/#ixzz29YubTL73

Topic: Energy

ROMNEY: "As a matter of fact, oil production is down 14 percent this year on federal land, and gas production was down 9 percent. Why? Because the president cut in half the number of licenses and permits for drilling on federal lands and in federal waters."

OBAMA: "Very little of what Governor Romney just said is true. We've opened up public lands. We're actually drilling more on public lands than in the previous administration and my — the previous president was an oilman."

THE FACTS: Both statements ring true, as far as they go. Obama more correctly describes the bigger picture.

According to an Energy Department study published in the spring, sales of oil from federal areas fell 14 percent between 2010 and 2011 and sales of natural gas production fell 9 percent, supporting Romney's point. The lower oil production was a result mainly of a moratorium on offshore drilling imposed by the Obama administration after the April 2010 BP oil spill in the Gulf of Mexico, the worst offshore oil spill in U.S. history.

According to the same report, though, oil production from federal areas is up 13 percent since Obama took office despite last year's dip, and analysts say Gulf oil production is expected to soon exceed its pre-spill levels.

Natural gas production from federal areas has been declining for years because drillers have found vast reserves of natural gas in formations under several states that are cheaper to access than most federally controlled areas.

Read more: http://latino.foxnews.com/latino/politics/2012/10/17/debate-fact-check-stumbles-in-latest-presidential-debate/#ixzz29Yurhp5n