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What Rate Hike: US Economic Output Worst Since Q1 2014 With Jobs Now Rolling Over
Now that GDP has become almost as meaningless an economic indicator as the unemployment rate (which at 5.1% is lower than China's but just happens to ignore tens of millions of potential workers who have given up hope to find a job and countless "disabled" individuals), and a few heavy snowfalls are sufficient to get economists clamoring for (and getting) double seasonal adjustments, many ask if there is another, more accurate way, of estimating US economic output.
The answer is: yes, there is - it's called "real economic output", and it is a released by the BLS every quarter, as a product of productivity, hours worked, and compensation and then applying a deflator adjustment.
This is perhaps an even more accurate indication of the true state of the US domestic economy considering all the complaints by the Fed over the state of the global economy and eliminate the "noise" from trade which has been depressing GDP for quarters.
Unfortunately, what the real output data reveals is not pretty. Rising by 2.3% Y/Y in Q3, this was not only down substantially from 3.4% in Q3 and 3.5% in Q1, but this was the weakest increase since Q1 2014!
But wait, there's more. As Newedge strategist Brad Wishak points out "for the last 20 years at least, a 285k 5-month Mov. Avg in the MoM Change in nonfarm payrolls has signaled the top in job creation for that cycle. This is shown in the chart below."
So on one hand we have US output growth slowing by a third in one quarter, on the other we may have peaked in the job creation cycle, and somehow Yellen is 6 weeks away from hiking rates?
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Yellen, raise rates bitch - or just shut the fuck up.
Quite. She managed to say BOTH things yesterday, the Fed will raise rates in December AND it will consider NIRP.
How she or the Fed has ANY credibility left is beyond me.
DavidC
I have been watching the VC guys I know go to cash and feather their "bug-out" properties. Somebody knows something.
VC?!! Don't tell me charlie is involved and inside the wire!
"Recovery Fall" number seven?
she said both things because they always give conflicting messages. they want trading volume so the bankers can get their bonus.
My take is the Fed will raise rates 0.25 in December, market will crash as muppets get trampled heading to the exits, and then rate will be immediately set to negative. I think the Fed doesn't have the balls to take the rates from 0 to negative under these "normal" conditions but really want to take the rate negative. I think they and their banksta masters are worried that 2016 will be the last year of free money because it is O's last year. It was a good run and they can make shitloads more if the rate is negative for all of 2016.
The Fed is leveraged 76-1 with low interest paper. If they raise rates they will be bankrupt. Now think for a minute and you control the piggy bank. What would you do?
Either self-recapitalize via their own printing press (unlikely) or simply claim that ordinary rules of insolvency don't apply to the Fed (very likely).
+1 one thought, though, and a very depressing one to boot: does that "piggy bank" have to worry? how much?
Example: Zimbabwe. CB killed the national currency. CB... is still there. Even the frigging regime is still there. And Mugabe recently got a Confucius Prize awarded by China
Like I said, over and over these bankers forgive their liabilities and debt...
Let's be optimistic and hope the people of the world start taking some fucking heads this time.
"one thought, though, and a very depressing one to boot: does that "piggy bank" have to worry? how much?
Example: Zimbabwe. CB killed the national currency. CB... is still there. Even the frigging regime is still there. And Mugabe recently got a Confucius Prize awarded by China"
In America and Europe they do because there are millions of over 100 IQ people.
They will do what they always do. Quitely "negotiate" away all their over-leveraged bad bets/debts behind the scenes (socializing their losses/risk). Sometimes this requires a world war, sometime not.
Either way, their liabilites will be gone, yours will NOT.
Pretty sad when the optimistic prediction is sharecropping and guillotines...
that actually makes sense. they have to raise rates so they can lower them. genius.
Not so sure this time. Internet is a game changer.
Bernanke should be shot for his commitment to Fed "transparency". First off, without a balance sheet audit "transparency" is just a grim jest. But even with just transparency of communications it's only taken a handfull of years for them to talk themselves into a corner. Now they're stuck and the more they claim not to be stuck the more stuck they are. One lie compounding another.
I really wish they'd all shut the fuck up- and I mean ALL of them. No press conferences, no interviews with individual Fed heads, no speaking engagements. Total black box.
Our best situation would be to pay them to sit on their hands and do nothing. Do not talk, do not take action, do not travel. Just take the annuity and run. Write the books they can publish when they resign.
Yellen: I was for RAISING rates before I was for NIRP.
Shades of John Kerry and Hillary Clinton.
What a shit show.
It would be better if she just said, lets raise rates to 3.75% and then you guys figure it out.
A rate hike and a decent one at that is long overdue but the necessary prerequisite to that would be a wholesale culling of debt. They can chose to do that either by agreement or by allowing the system to crash and burn in order for it to happen.
This may seem unfair to savers but let's face it, what bloody good are their savings when the interest paid on their savings is miniscule and the asset surges we have witnessed have implicitly and explicitly further devalued their paper dollars.
did anyone see the ZH post last evening about Fischer saying inflation is higher than anyone thinks??
OK--so that takes care of the GDP deflator and this real growth index Tyler speaks of here. That means we have had contraction for 6 years.
Also, it means that the Social Sec COL is a total sham (vs just a sham) and the Congress and Govt have been reducing benefits all along, compounded no less. That should tell us all how much Congress really cares about the people they are pandering to on votes now.
LOL!!! What "market"? What did you asshats expect with "mark to fantasy" and a monetary system that let's the majority "eat cake"?
That which cannot be sustained won't be, period.
Same as it ever was.
nirp can fix this /s
15 minutes... -B Bernank
Ughhhhhh...they've been saying "just the tip" for 7 years now, all the while gangbanging the US public and whats left of the dollar
What we need is moar workers who will do the jobs Americans are not willing to do. That will fix everything.
Well, Yes. She said so.
another reason for the stock market to hit a high
They have to keep ramping up stocks. It's the Fed's only game, besides QE,
Well and housing. Keep housing propped up like a hippo with chopsticks as stilts.
And buyer of last resort for Treasuries.
http://www.federalreserve.gov/faqs/how-does-the-federal-reserve-buying-a...
yogibear,
So true. If only for the psychological effect that keeps people spending. If we get even a stagnant long term stock market, the sheeple will not keep spending and taking on debt. We should acknowledge the Fed has at least succeeded in keeping us muddling along.
all they have left is fedshit. in the old days, talk about having to raise rates in a hot economy made people want to borrow money today. in the new economy, tlk about raising rates is a day trade play bcause anyone who follows this tangled web knows it is bs, hence, fedshit.
Hmmmn, what else is new? The oligarchs and bankers pushed demand far forward by getting millions of lemmings to borrow cheap Fed $$ and buy crap from China. Someday the economy would reach ‘escape velocity’ their charts told them. But, it never did, and never will. The useless congress raised the debt ceiling again because ANY attempt at austerity means economic collapse. Moar debt is all they can do anymore. And once American consumers max out debt again and fall behind on payments, the banks will need bailouts again. The latest housing bubble will wreak havoc when it bursts; it may be bigger than the last one.
GREED, that is all. Drive stocks higher with buybacks and hope the fools borrow more and spend more. After a failed X-mas season again, there will be the largest mass layoffs ever. The MIC will likely have as in a major war by then too. Half the country is already living off government largeness and it will only grow as more immigrants pour in fleeing global chaos and collapse. The bears have taken a beating believing it has to fall apart any day, but too big to fail means just that. The oligarchs will throw everything at it…every day. Good luck…should be an exciting and bumpy ride down.
The headline of this article is misleading. Yahoo has is correct as they say:
"U.S. productivity rises in the third quarter, manufacturing strong"
<sarc>
Don't look now,
But the October event has happened. Yellen/FED has prepped the markets well in advance(as they do),
Repeating "We are going to raise rates"
The EVENT was the breakout of the Dollar from long consolidation. In my opinion this was the event everyone was dreading.
I believe rates are rising. I believe commodities are falling.
Currencies? Oil=Energy=Economic Activity?
One destructive tool unleashed.
Are you suggesting that the debt and trade imbalance don't matter?
Good luck with that.
I love the fact that the Fed is blasting the trumpets on the coming rate hike.
What could be more ironic than the Fed raising rates and showing us they mean business as the economic reality disintegrates...
Damn the Torpedoes! Full Speed Ahead!
I read an article that Yellen & her "deputies" tweaked the FOMC statement to show a greater intent to lift rates by the end of the year because INVESTORS IGNORED THE MESSAGE.
Doesn't anyone CARE AT ALL about Americans outside of the investor class, the financial industry, and the 1%??? I mean, anyone? Anyone at all? Hello?
Just hang in there for the best excuse to arrive;
Winter! It's the weather people that damn weather!
Do we (U.S. residents) live in a political economy, or not? If so, you had this all figured out upon launch of QE-1...
You mean TARP right? Over 90% of the polled US citizens were against TARP, and those fucking idiots in Congress passed it anyways.
That's because they care about us, and know what is really in our best interest.
Now you have a comforting, warm feeling of content. You're welcome.
That was an awesome cyber-hug. Thank you. Wait, where's my wallet?
"and know what is really in our best interest." Communism in a nutshell....