Economy | - Part 4

A Dearth of First Quarter Economic Growth

As was the case a year ago when harsh winter weather visited the East Coast, the first quarter of 2015 is turning out to be something of a bust GDP growth-wise as evidenced by the Atlanta Federal Reserve’s GDPNow forecast shown below.

Bolstering the argument that this was a weather-related slowdown, about a quarter of the recent decline can be attributed to shrinking fixed investment in structures by businesses (though, countering that argument is the lack of a similar decline in residential building).

A widening trade gap accounts for another quarter of the drop but, despite the conventional wisdom of the impact of sharply lower energy prices, it was consumption – America’s growth engine – that accounted for about half of the overall decline since this data series began in January,  all of which suggests the growth slowdown may not be a transitory.

While following U.K. Prime Minister David Cameron’s tweets is not part of my regular morning routine and, perhaps, there is some important context missing here (none that was obvious after a little poking around), it appears that David Cameron doesn’t think much of China’s economy as he trumpets the recent rate of GDP growth at home.

This came to my attentions via this Telegraph story where it is learned that the next U.K. election is only 37 days away – that explains a lot about the creation of this graphic.

Nonetheless, a simple change from “Major” to “Western” would have been better.

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The Dismal Trend in Median Income

I don’t recall what prompted the search for this chart at the St. Louis Federal Reserve but, when it was found, it was deemed to be so thoroughly depressing that it just had to be shared, knowing that it could be made to look even worse if such things as the dearth of recent household formation and rising health care costs were somehow superimposed.

Sadly, a chart showing real mean (average) household income could not be located at the St. Louis Fed. If one were available, then another good example of rising income inequality vis-a-vis the difference between median and mean could be offered.

Alas, this graphic on median vs. mean wages at the Social Security Administration can substitute – what was once a gap of $5,000 per year has grown to be a gap of $15,000.


Here’s the chart from about half-way through a highly entertaining Ted talk (due in part to a Tennessee twang) given by hedge fund billionaire Paul Tudor Jones depicting where the U.S. stands on a measure of inequality via-a-vis social ills (go here for the entire clip).

It’s not clear how that left scale is calculated, by my guess is that the American obesity epidemic is what puts this nation off the chart.

Of course, the headlines that were generated from this talk had to do with how situations like those depicted in the chart are resolved and I’ve obliged in the title above.

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