US Economy Slows Sharply, Inflation Heats Up

#1
http://www.washingtonpost.com/wp-dyn/content/article/2006/07/28/AR2006072800408.html

U.S. economic growth slowed and inflation rose in the three months ending in June, the government reported today
...
Meanwhile, consumer prices shot up at a heated 4.1 percent annual pace in the quarter, according to Commerce's inflation measure.
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The inflation rate was much higher than the increase in workers' wages, salaries and benefits
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Commerce also revised its economic figures for 2002-2005, to show slightly slower growth and higher inflation than previously reported.
 
#3
Don't worry about it, it's called being out of the White House by the time it all really goes chebs up
 
#5
Which leads us to the amazing blame-someone-else cycle
 
#6
As I have pointed out befor The US administration, The Bush administration, stopped posting the figure for M3 the actual number of $ in circulation.
Without the figure Financial professonals cannot acurately calculate the true figure on inflation.
The government still collects the data but find that its cheaper not to publish.
john
Like Brown in UK they will not admit the true figure of inflation.
 
#7
as long as i get more Dollars for my Pounds im happy as im going stateside in september :)
 
#8
jonwilly said:
As I have pointed out befor The US administration, The Bush administration, stopped posting the figure for M3 the actual number of $ in circulation.
Without the figure Financial professonals cannot acurately calculate the true figure on inflation.
The government still collects the data but find that its cheaper not to publish.
john
Like Brown in UK they will not admit the true figure of inflation.
Not quite true. The administration doesn't make that call the Fed Board does and consists of appointees whose tenure is independent of which party is in office. Here is the actual announcement:

On March 23, 2006, the Board of Governors of the Federal Reserve System will cease publication of the M3 monetary aggregate. The Board will also cease publishing the following components: large-denomination time deposits, repurchase agreements (RPs), and Eurodollars. The Board will continue to publish institutional money market mutual funds as a memorandum item in this release.

Measures of large-denomination time deposits will continue to be published by the Board in the Flow of Funds Accounts (Z.1 release) on a quarterly basis and in the H.8 release on a weekly basis (for commercial banks).

M3 does not appear to convey any additional information about economic activity that is not already embodied in M2 and has not played a role in the monetary policy process for many years. Consequently, the Board judged that the costs of collecting the underlying data and publishing M3 outweigh the benefits.
 
#9
Ah, but why are Money Magazines and articals on investment complaining about the sudden withdrawl of this facility which enables Profesional Investors to see just what the US is actually doing.
john
Somefings rotten in the state of ? methinks.
 
#10
jonwilly said:
Ah, but why are Money Magazines and articals on investment complaining about the sudden withdrawl of this facility which enables Profesional Investors to see just what the US is actually doing.
john
Somefings rotten in the state of ? methinks.
A couple of reasons I suspect; private firms will have to gather and number crunch the data at large cost to themselves and second everyone loves a good conspirarcy theory.

M3 is the broadest measure of money in the US economy which includes dollars outside the influence of the Federal Reserve. Arguably from the Fed's viewpoint it doesn't matter as much as a measurement for itself as it does for everyone else in the market and it possibly allows it to follow a less stringent monetarist policy without a whole lot of drama (this may be the 'rotten' part).

Frankly I'll bet it's reinstated within a year as pressure from the financial lobbies gathers and a move within Congress to pass legislation requiring the FR to supply the M3 is being presented.
 
#11
jonwilly said:
As I have pointed out befor The US administration, The Bush administration, stopped posting the figure for M3 the actual number of $ in circulation.
Oh come on... this slow down has been developing long before Bush became president (just take a look at home equity levels over time) and M3 is not the be all and end all of inflation measures. The Fed itself has long said that it prefers to using core CPI.
 
#12
"All totaled, the nation's gross domestic product, which measures the value of all goods and services produced in the United States, rose at a below-average 2.5 percent annual rate in the second quarter, a sharp drop from the rapid 5.6 percent pace of the first quarter, the Commerce Department reported yesterday."

Let me get this straight. US growth temorarily drops from an annualised rate of 5.6% (a rate even China and India would not be too unhappy with) to a 'below average' 2.5%, and this obviously to the likes of Sergey presages the imminent collapse of the US economy and US power generally? :roll: For most countries in the EU, achieving annualised growth rates of 2.5% would be heralded as an economic miracle and shouted from the rooftops!

Sergey, whatever the temporary ups and downs of the US economomy, you can rest assured it will be at least ten times bigger than the Russian economy at least for the rest of your life and probably for those of your children and grandchildren.
 

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