November 29, 2017

National Media Not Interested As Philly Soda Tax Collections Flounder

In June of last year, with much national media fanfare, the City of Philadelphia passed a dishonestly named “soda tax.” The levy of 1.5 cents per ounce, which taxes not only sugar-sweetened beverages but also drinks containing “any form of artificial sugar substitute, including stevia, aspartame, sucralose, neotame, acesulfame potassium (Ace-K), saccharin, and advantame” after it took effect on January 1, was supposed to raise over $90 million. Actual collections are falling far short, and appear to be in decline. The national press is uninterested in reporting this result.

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WashPost ‘Fact Check’ Angrily Gives Pence’s True Statement About Jobs ‘Three Pinocchios’

In one of the more brazen and fraudulent “fact checks” one will ever see, the Washington Post’s Nicole Lewis told readers on Tuesday that Vice President Mike Pence’s absolutely true mid-November statement that “There are more Americans working today than ever before in American history” deserved “Three Pinocchios,” and that the audience which applauded this statement should be ashamed of themselves. The bogus nature of Lewis’s “fact check” is only exceeded by the seething anger which virtually drips down readers’ screens.

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3Q2017 Gross Domestic Product, 2nd Estimate: An Annualized 3.3 Percent, Up From Original Estimate of 3.0 Percent; Not As Positive As One Might Think

Filed under: Economy,Taxes & Government — Tom @ 7:00 am

This post may not be live on Wedneday because the (hopefully) final resolution of medical matters will be taking place. We’ll see.

Update, 8:25 a.m.: Surprise. I’m here live.

The first reading of GDP for the third quarter came in at an annualized 3.0 percent a month ago. Tomorrow’s reading appears to be headed a bit higher, but I’m having a hard time finding specifics:

  • As of late Tuesday, Bloomberg was only reporting that “The second print of third-quarter U.S. GDP on Wednesday may be revised up thanks to consumer spending and inventory accumulation.”
  • Moody’s is predicting an upward revision to 3.3 percent, but “the risks (of a different result from that) have shifted from the upside to the downside.”
  • Last-minute update: Found an AP item from Monday predicting 3.2 percent.

If there are other estimates out there, I couldn’t find them.

One other pre-release comment: There’s no way anyone can look at how poorly the economy performed last year and give the Obama administration any kind of credit for giving Donald Trump economic momentum going into his administration. In fact, I’d argue that without Trump’s election a year ago, we might have seen 4Q16 come in below 1 percent and 1Q17 go negative.

The report will be here at 8:30.

HERE IT IS (permanent link with tables): An improvement, but as will be explained later, there’s less here than meets the eye —

Real gross domestic product (GDP) increased at an annual rate of 3.3 percent in the third quarter of 2017, according to the “second” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 3.1 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 3.0 percent. With this second estimate for the third quarter, the general picture of economic growth remains the same; nonresidential fixed investment, state and local government spending, and private inventory investment were revised up from the prior estimate.

Real gross domestic income (GDI) increased 2.5 percent in the third quarter, compared with an increase of 2.3 percent (revised) in the second. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 2.9 percent in the third quarter, compared with an increase of 2.7 percent in the second quarter.

The increase in real GDP in the third quarter reflected positive contributions from PCE, private inventory investment, nonresidential fixed investment, and exports that were partly offset by a negative contribution from residential fixed investment. Imports, which are a subtraction in the calculation of GDP, decreased.

The acceleration in real GDP in the third quarter reflected an acceleration in private inventory
investment, a downturn in imports, and smaller decreases in state and local government spending and in residential fixed investment that were partly offset by decelerations in PCE, in nonresidential fixed investment, and in exports.

Current-dollar GDP increased 5.5 percent, or $259.0 billion, in the third quarter to a level of $19,509.0 billion. In the second quarter, current-dollar GDP increased 4.1 percent, or $192.3 billion.

Corporate Profits

Profits from current production (corporate profits with inventory valuation adjustment and capital consumption adjustment) increased $91.6 billion in the third quarter, compared with an increase of $14.4 billion in the second quarter.

UPDATE: Here’s the detail chart for the past seven quarters:

GDPcomponentsThru3Q17at112917

My take on changes seen in this month’s revision and the changes from second quarter to third quarter is that I don’t think they’re healthy.

Health care spending’s contribution to GDP shot up from the second quarter to the third. That’s not helpful, especially GDP contributions from spending on all other services almost disappeared plummeted from 0.55 points to 0.15 points, with this month’s revision taking this quarter’s contribution down from 0.47 points to 0.15 points. Combine “all other” with “other services” above and you see a decline in GDP contribution from 0.93 points to 0.24 points.

These are not encouraging signs that consumers are backing up the optimism they’re expressing in surveys by actually buying everyday goods and services.

It is encouraging that the investment side improved a bit, and that imports are less of a drag on GDP than they have been. But, especially because it appears that fourth-quarter inventories are falling, a similar fourth-quarter performance in consumer spending other than health care will not yield an overall result above 3.0 percent.

Wednesday Off-Topic (Moderated) Open Thread (112917)

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: Auto shop employees credited with taking down accused Rockledge gunman

Filed under: 2nd Amendment,Positivity — Tom @ 5:55 am

From Rockledge, Florida (HT Bearing Arms):

Published 11:13 a.m. ET Nov. 25, 2017
Updated 12:17 p.m. ET Nov. 25, 2017

A man armed with a .45-caliber handgun and a lot of ammunition wandered onto an auto repair shop property and began firing in the parking lot Friday afternoon, police said.

The gunman killed one employee and paralyzed a second. That’s when the employees at Schlenker Automotive fought back with equal force, Rockledge police chief Joseph La Sata said.

“The manager, who was a concealed weapons permit holder, came out and engaged in gunfire in the parking lot,” La Sata said. “The manager fled back inside the building, being chased by the gunman. Another Schlenker employee, who also had concealed weapons permit, engaged in gunfire with the suspect.”

Police said the suspect in the homicide is Robert Lorenzo Bailey Jr., 28, of Cocoa. He was shot twice and was in critical condition at Health First’s Holmes Regional Medical Center in Melbourne. Officers are keeping him under watch.

“If not for the brave, quick thinking of the employees at Schlenker, this could have been a lot worse,” La Sata said. “Mr. Bailey had multiple magazines on his person. He was intent on doing harm. The employees stepped up.” …

Go here for the rest of the story.