Softening of the economy

[Dave Grubb]

A few weeks ago, in another thread I mentioned that the economy was softening. I was immediately attacked by one of my professional haters for being clueless.

My comment was only a statement of fact based on my own immersion in the economy.

So---here are the emerging facts, extracted from the WSJ today:

By Harriet Torry
Updated Oct. 30, 2019 11:30 am ET

WASHINGTON—U.S. economic growth settled in at a lower gear in the third quarter, with consumer spending and housing investment increases offsetting a business investment drop.

Gross domestic product—the value of all goods and services produced in the U.S.—rose at an annual rate of 1.9% from July through September—adjusted for inflation and seasonality, the Commerce Department said Wednesday, compared with 2.0% in the second quarter.

“I think it’s consistent with an economy that’s just moving back towards trend,” Michael Feroli, an economist at JPMorgan Chase & Co., said of the growth reading.

The stronger-than-expected growth rate was boosted by government and consumer spending, residential investment and exports. Still, business spending declined for the second quarter in a row. Investment in structures dropped sharply, particularly those related to the petroleum and natural gas industries.

The Commerce Department report showed the divergence between relatively solid consumer spending and falling business investment continued from the second quarter into the third, as the long-simmering trade war with China escalated. The report came hours ahead of a scheduled rate announcement from policy makers at the Federal Reserve, who conclude a two-day policy meeting later Wednesday.

The central bank cut interest rates twice in the third quarter. Officials are expected to again cut the benchmark federal-funds rate by a quarter percentage point, to a range between 1.50% and 1.75%, aiming to shield the economy against growing risks of a sharper economic slowdown.

[UTAH]

What I've seen is growth in certain sectors without corresponding matches in others. We've all witnessed rising housing costs and some rising markets. What's disappointing to many workers is a lack of pay matching those increases. So, as prices rise, it's increasingly difficult to pay resultant higher prices. In other words, the economy has been growing, but many workers have been unable to keep up.

My wife and I have prepared for a recession. I hope my friends here have done the same.

Hunter

[Dave Grubb]

Manufacturing has actually contracted in the last few months---not good when that happens to be one of the highest paying sectors of the economy. Most of this is being driven by the trade issues.

[wacojoe]

We are taking a hit while trying to get China under control from stealing our jewels. Best to undertake that while we are up rather than down even if a hit results. Trump is the only pol in sight to take on the task.

[Billy_Rightwing]

Except for Joe looks like a lot of gloom and doom, hey our social security is rising a few cents so lets be happy.

[Dave Grubb]

Notice that I did not offer opinion or criticism.

[Blue74]

Manufacturing has actually contracted in the last few months---not good when that happens to be one of the highest paying sectors of the economy. Most of this is being driven by the trade issues.

Just look at the number of trucking companies that are cutting back or folding.