For the second month in a row, personal disposable income (DPI) grew at a faster rate, advancing 0.4% in March—the best pace so far this year, according to today’s update from the U.S. Bureau of Economic Analysis. It’s also the first month since December that DPI growth exceeded the increase in personal consumption expenditures, which gained 0.3% last month.
Strategic Briefing | 4.30.12 | U.S. Recession Risk
Sluggish U.S. growth continues
James Hamilton (Econobrowser) | April 27
The slow pace of GDP growth continues to disappoint, particularly for the 12.7 million Americans actively looking for jobs and still unable to find them. On the other hand, the U.S. is unquestionably better off than would be the case had the September prediction of the Economic Cycle Research Institute that the U.S. was about to enter another recession proved to be accurate. The latest GDP report brings our Econbrowser Recession Indicator Index down to 4.0%. For purposes of calculating this number, we allow one quarter for data revision and trend recognition, so the latest value, although it uses today’s released GDP numbers, is actually an assessment of where the economy was as of the end of the last quarter of 2011. The index would have to rise above 67% before our algorithm would declare that the U.S. had entered a new recession.
Book Bits | 4.28.2012
● End This Depression Now!
By Paul Krugman
Adapted excerpt via The New York Times
When the financial crisis struck in 2008, many economists took comfort in at least one aspect of the situation: the best possible person, Ben Bernanke, was in place as chairman of the Federal Reserve. Bernanke was and is a fine economist. More than that, before joining the Fed, he wrote extensively, in academic studies of both the Great Depression and modern Japan, about the exact problems he would confront at the end of 2008. He argued forcefully for an aggressive response, castigating the Bank of Japan, the Fed’s counterpart, for its passivity. Presumably, the Fed under his leadership would be different. Instead, while the Fed went to great lengths to rescue the financial system, it has done far less to rescue workers. The U.S. economy remains deeply depressed, with long-term unemployment in particular still disastrously high, a point Bernanke himself has recently emphasized. Yet the Fed isn’t taking strong action to rectify the situation.
US Economic Growth Slows In Q1, But Annual Pace Quickens
U.S. economic growth slowed in the first quarter, the Bureau of Economic Analysis reports. Q1 GDP grew at an annual 2.2% rate in the first three months of 2012, considerably slower than the 3.0% increase in last year’s fourth quarter. The downshift will surely feed worries that the economy is struggling, particularly after the sharp drop in March durable goods orders and the modest upturn in recent weeks in new jobless claims. But today’s GDP report isn’t a smoking gun for arguing that a recession is imminent. Measured on a year-over-year basis, GDP growth accelerated, which suggests that the economy still has enough forward momentum to steer clear of a new downturn for the immediate future.
Three Regional Fed Surveys Report Slower Growth In April
April’s economic activity appears mixed, according to business surveys published by four regional Fed banks. Although all four updates reflect continued growth, three of the four indicate a slower pace of expansion in April vs. March. Only the central Atlantic region via the Richmond Fed indicated faster growth for the month. Here are excerpts from each report:
Has The Labor Market Hit A Wall… Again?
Weekly claims for new unemployment benefits are in a holding pattern these days. But holding for what?
Parsing The Finer Points Of “Reckless” Behavior For Monetary Policy
The word “reckless” is defined as acts that are irresponsible, wild, thoughtless, and the byproduct of someone who is utterly unconcerned about the consequences of some action. And for the record, Fed chairman Ben Bernanke wants you to know that he will tolerate none of those personal failings as a steward of the nation’s monetary policy.
March Durable Goods Orders Drop Sharply
The margin of safety for durable goods orders is wearing thin. This series isn’t forecasting a recession, at least not yet, but it’s now the closest to crossing the line since the U.S. slipped into macro darkness in 2008.
Strategic Briefing | 4.25.12 | A New Recession For Britain
UK slides back into recession
Reuters | April 25
Britain’s economy is in its second recession since the financial crisis, data showed on Wednesday, heaping pressure on Prime Minister David Cameron’s coalition government as it battles a series of political embarrassments. The unexpected contraction in the first three months of 2012 – a 0.2 percent dip in gross domestic product – confounded forecasts for 0.1 percent growth.
What Happened To Peak Oil?
Fears that the world is running short of oil aren’t going away, but judging by the latest figures on global oil production there’s no sign that the peak oil factor is an imminent threat. Global output rose to a new all-time high last December, according to data from the U.S. Energy Information Administration (EIA): 75.384 million barrels per day, or just ahead of the previous peak of 75.170 million barrels a day in January 2011.