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Tag Archives: real GDP

The Shock, The Squeeze, and The Downside

Yesterday, Eurostat confirmed that German GDP in Q2 2019 had contracted. Also issuing benchmark revisions, the European government agency found that GDP growth had been slightly better than previously thought at the top of Reflation #3. The last two quarters of 2017 saw the biggest upward revisions. But if Europe’s “boom” really was a little closer to having been a real one, all that does is magnify the disappointment which has followed. Why didn’t it keep going? Eurostat’s newest benchmark...

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Europe’s Further Confirmation(s)

The key takeaway from Europe’s economic data dump today isn’t that the whole Continental economy is poised on the verge of recession, though that’s thrust of what’s being written about most. The reason is simple; this is all highly unexpected in the mainstream. Going by official accounts alone, there was never a hint of trouble before just recently. And many still believe this is all just overreacting. Mario Draghi like Jay Powell made his final hawkish move in December 2018. He actually made...

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Poring Over Poor Singapore’s Far Nastier Number Four

You aren’t going to find the worst economic quarter in Singapore’s modern history in either 2008 or 2009. It was actually posted in 2010. During the third quarter of that year, GDP declined by a whopping 11% annual rate. While that’s the biggest contraction still on record, initial government estimates thought it was closer to -20%. Singapore’s Monetary Authority wasn’t worried, however. Officials often complain about lumpiness in their numbers, and in the city’s case it was actually true for...

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China’s Managed Decline Manages Another Quarter

The latest batch of economic from China featured a little something for everyone. For those thinking about a second half rebound, retail sales gained nearly 10% in June. It was the first time near to double digits since March 2018. At the other end of the spectrum, Real GDP rose just 6.2% year-over-year in the second quarter. That’s the lowest in modern China’s history. The rest of the data fell somewhere in between, a muddled middle of low-state growth and cancelling oscillations. Some are...

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3/7/19: Record Recovery: Duration and Perceptions

While last month the ongoing 'recovery' has clocked the longest duration of all recoveries in the U.S. history (see chart 1 below), there is a continued and sustained perception of this recovery as being somehow weak. And, in fairness, based on real GDP growth during the modern business cycles (next chart), current expansion is hardly impressive: However, public perceptions should really be more closely following personal disposal income dynamics than the aggregate economic output...

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The Road To July Rate Cut Runs Through the Brazilian Zone

The way I look at the global economy, there are basically five different zones. The first is the US and the second is Europe. China might be third on this list but often second if not first in terms of what’s driving marginal changes. In behind those is Japan, not what it once was but still often a bellwether for those changes. Lastly, there is the developing world (as well as any small DM economies not otherwise assigned). Standing in for the final group, I often turn to Brazil as a proxy....

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With Rate Cuts Looming, A Necessary Bit of Perspective Before Going Into Them

It is sometimes amazing what happens when you add just a little perspective. In some cases, it doesn’t require much at all to do so. One little addendum can upend the entire message, leading you off into entirely different interpretations. The implications can be enormous. To see what I mean, let’s begin with the basics. Below is what the public is shown, or thereabouts. The economy is booming at record high GDP: At first glance, even a deeper gaze, it’s next to impossible to see anything...

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Japan’s Surprise Positive Is A Huge Minus

Preliminary estimates show that Japanese GDP surprised to the upside by a significant amount. According to Japan’s Cabinet Office, Real GDP expanded by 0.5% (seasonally-adjusted) in the first quarter of 2019 from the last quarter of 2018. That’s an annual rate of +2.1%. Most analysts had been expecting around a 0.2% contraction, which would’ve been the third quarterly minus out of the last five. This is another one of those cases, however, where GDP accounting is beyond unhelpful. In the US,...

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Effective Recession First In Japan?

For a lot of people, a recession is two consecutive quarters of negative GDP. This is called the technical definition in the mainstream and financial media. While this specific pattern can indicate a change in the business cycle, it’s really only one narrow case. Recessions are not just tied to GDP. In the US, the Economists who make the determination (the NBER) will tell you recessions aren’t always so straightforward. Everyone knew about the second half of the Great “Recession” because...

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What’s Germany’s GDP Without Factories

It was a startling statement for the time. Mario Draghi had only been on the job as President of the European Central Bank for a few months by then, taking over for the hapless Jean Claude-Trichet who was unceremoniously retired at the end of October 2011 amidst “unexpected” chaos and turmoil. It was Trichet who contributed much to the tumult, having idiotically raised rates (twice) during 2011 even as warning signs of crisis and economic weakness were everywhere. Central bankers had built...

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