May 26, 2017

Media Ignored Rosy Obama-Era Growth Assumptions, But Now Attack Trump’s 3 Percent Target

One of the more absurd spectacles in the press’s coverage of the economy is this week’s attack on the Trump White House’s long-term economic growth assumptions in this week’s budget release. The same reporters, pundits and outlets now ridiculing the Trump administration’s belief that the economy can consistently grow by 3 percent each year beginning four years from now were stone silent when the Obama administration, whose alums have joined the current negative chorus, used far higher growth assumptions — and miserably failed to achieve them.

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AP, As Another Dem Loses: Montana House Race Was ‘Not So Much’ a ‘Trump Test’

Longtime media bias observers know that if a Democrat wins a single special election race for national office during a Republican presidential administration, the press will say it’s evidence that the nation’s voters have changed their minds about which party should occupy the White House. If the Democrat loses … well, in the pre-Internet era, the national press would pretend that the race never happened. These days, they instead have to come up with excuses, which are usually pathetic. The Associated Press engaged in such an exercise Friday morning after Republican Greg Gianforte defeated Democrat Rob Quist for Montana’s single US House seat.

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1Q17 Gross Domestic Product, Second Estimate (052617): An Annualized 1.2 Percent, Revised Up from 0.7 Percent

Filed under: Economy,Taxes & Government — Tom @ 8:29 am

Predictions:

The report will be here at 8:30.

HERE IT IS (full text release with all tables) — Surprise, surprise (not really; readers of my post a month ago may recall that I saw this coming):

Real gross domestic product (GDP) increased at an annual rate of 1.2 percent in the first quarter of 2017 (table 1), according to the “second” estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 2.1 percent.

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 0.7 percent. With this second estimate for the first quarter, the general picture of economic growth remains the same; increases in nonresidential fixed investment and in personal consumption expenditures (PCE) were larger and the decrease in state and local government spending was smaller than previously estimated. These revisions were partly offset by a larger decrease in private inventory investment.

Real gross domestic income (GDI) increased 0.9 percent in the first quarter, in contrast to a decrease of 1.4 percent (revised) in the fourth. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 1.0 percent in the first quarter, compared with an increase of 0.3 percent in the fourth quarter.

… The increase in real GDP in the first quarter reflected positive contributions from nonresidential fixed investment, exports, residential fixed investment, and PCE that were partly offset by negative contributions from private inventory investment, federal government spending, and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased.

The deceleration in real GDP in the first quarter primarily reflected a downturn in private inventory investment and a deceleration in PCE that were partly offset by an upturn in exports and an acceleration in nonresidential fixed investment.

Current-dollar GDP increased 3.4 percent, or $158.2 billion, in the first quarter to a level of $19,027.6 billion. In the fourth quarter, current-dollar GDP increased 4.2 percent, or $194.1 billion.

The price index for gross domestic purchases increased 2.6 percent in the first quarter, compared with an increase of 2.0 percent in the fourth quarter (table 4). The PCE price index increased 2.4 percent, compared with an increase of 2.0 percent. Excluding food and energy prices, the PCE price index increased 2.1 percent, compared with an increase of 1.3 percent.

A month ago, I said that “I’d guess that future revisions are going to take this number up.” The “this number” reference was to personal consumption expenditures, which increased from contributing .23 points to GDP originally to 0.44 points in today’s release, accounting for about 40 percent of the 0.5-point upward revision.

The updated contributions to GDP table will appear shortly.

UPDATE: Here it is —

GDPcomponentsThru1Q17at052617

The notables (to me) are highlighted.

I believe the revisions with the services element of personal consumption are to things that represent recognizable standard of living improvements, as opposed to health care (and health insurance within “other services,” which for the most part don’t).

Also, the fixed investment uptick is good news for future productivity and GDP improvements.

Friday Off-Topic (Moderated) Open Thread (052617)

Filed under: Lucid Links — Tom @ 6:00 am

This open thread is meant for commenters to post on items either briefly noted below (if any) or otherwise not covered at this blog. Rules are here.

Positivity: How a nun’s home is helping girls freed from sex trafficking

Filed under: Positivity — Tom @ 5:55 am

From Baton Rouge, Louisiana:

May 26, 2017 / 03:33 am

The numbers are staggering. Each year in the U.S. alone, some 300,000 minors are victims of sex trafficking.

In Louisiana, state estimates indicate that about 40 percent of juvenile victims are being trafficked by their primary care giver: a mother, father, foster parent, uncle, a mother’s boyfriend.

Father Jeff Bayhi has heard unspeakable stories of sex trafficking victims over the years.

That’s why the pastor of St. John the Baptist Catholic Church in Zachary, La. has worked to open Metanoia Home, a Baton Rouge-area shelter for sixteen women under age 21.

Caring for the victims are four Hospitaler Sisters of Mercy from India, Nigeria, the Philippines and Madagascar.

“They’re not there as social workers or therapists,” but as mother figures, Fr Bayhi said. “They’re going to be there, and be a safe place for these children to be. To be loved, to be nurtured, to be made felt special again in the sight of God.”

The project is modeled after the initiatives of Sister Eugenia Bonetti. The Milan-based Consolata Missionary sister heads the Slaves No More association. She has trained responders to help trafficking victims. Her former students work around the world.

“We have worked with her a great deal,” Fr. Bayhi said of Sr. Bonetti. “She has been here and addressed our legislature. She’s our model.”

Given the grim reality of human trafficking, thousands more people are needed to follow that model. …

Go here for the rest of the story.