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Explaining Today's "Bounce-Back" GDP Report

Wednesday, July 30, 2014

help wanted, sign, jobs, economy, employment (B.J. McCray/flickr)

After the U.S. economy shrank in the 1st quarter, today's report shows 4% expansion -- but with some important caveats and revisions. Charlie Herman, business and economics editor for WNYC News, breaks down the numbers and what to expect from the many other economic indicators out this week.

Guests:

Charlie Herman

Comments [13]

905 days and 30 minutes until this Economic Illiterate leaves the White House..... and maybe we can THEN see academic records and find out that he never took an economics course or any math beyond 9th grade algebra ... but we gave him an economy to run based just on his celebrity and our guilt.

Thank you, affirmative action.

Jul. 30 2014 11:28 AM
fuva from harlemworld

Amy, say word. "Trickle-down" is not the only nonsense Brian let slide here. Brian's great, but in this way he exemplifies how unreliable the media – given their relatively high monetary and social capital – often are for working class people...

Jul. 30 2014 10:32 AM
RUCB_Alum from Central New Jersey

And since their incomes lagged the overall economy for so long, Americans drew money out of the 'piggy bank' via sub-prime cash-out refi's to support their lifestyles. Bush II's failure to curtail $4/g gasoline quickly was the match to light the debt collapse fire.

Jul. 30 2014 10:27 AM
Andy from NYC

How far does the guest think these GDP numbers will be revised downward?

Jul. 30 2014 10:20 AM
Omid Malekan

In response to the caller who defended stock market gains in terms of benefits to pension funds, we should remember one reason public pensions are so underfunded is because of our artificially induced low rates. There was a time funds could make a safe 5% in bonds. Now thanks to the Fed they make less than half of that, so they have to chase returns in riskier places like the stock market or hedge funds (which also happen to be managed by very wealthy individuals buoyed by hefty fees). Another way the Fed inflates the wealth gap.

Jul. 30 2014 10:17 AM
Beth from Crown heights, Brooklyn

I love this idea of "ask an economist".

I have a question about the meaning of job growth. For instance- I work in theater, & the show I'm working on is closing in August. I already have another show lined up for when this show closes, but does that count as a "new" job? It's new to me, but perhaps not to the economy.

Jul. 30 2014 10:17 AM

Horseshit, Jamie. Investments CAN ONLY be made with surplus money. Incomes have been lagging for generations such that the 'average' worker has no surplus. Fact, 1968's minimum wage worker commanded more goods and services than today's average wage worker. In other words if min wage had grown with the GDP, it would be $27/hour.

Jul. 30 2014 10:15 AM
Amy from Manhattan

Can we deep-six that cliche already? Mr. Herman mentioned wage stagnation; the tide hasn't been lifting "all boats" for the last 30 years.

Jul. 30 2014 10:13 AM
barb from NYC

What's with all the hand-wringing? It's not rocket science. If it weren't for the Republicans, we would have enacted a sufficient amount of stimulus in 2008 OR more stimulus since then. Interest rates are TINY now, so it's a great time for the govt. to borrow, and our infrastructure is falling apart and needs repair, and infrastructure repairs would create LOTS of jobs, people would have money to spend again (finally) and that would boost/boom the economy.

Why haven't we done this? GOP hysteria for their own selfish political goals.

PS: "Cuts to Social Security," Brian? Soc. Sec. has nothing to do with any deficit; has nothing to do with it.

Jul. 30 2014 10:13 AM
John from Fanwood

I have my retirement savings in a S&P index fund and it's been earning double digit interest for a few years. I've heard rumors about a bubble similar to the tech thing in the 90s. Any insights into that?

Jul. 30 2014 10:08 AM
antonio from baySide

The guest really think corporations in the United States are going to be more generous with raises?

That would go against the trend for at least the last two decades...

Jul. 30 2014 10:07 AM
Wen

GDP has become so manipulated a figure (like inflation numbers) in recent time that it is meaningless. To the point, that there is talk about putting black market numbers into the calculation. How would they know how much prostitution or illegal drug sales, etc goes on? They don't. It just gives them more latitude to make up numbers. Just like the Fed no longer giving out M3 money supply numbers, claiming it is out of date - that represents the amount of dollars in circulation which have grown exponentially.

Jul. 30 2014 10:00 AM

More important than quarter to quarter variances in how GDP is reported, I am more interested in how does the GDP increase not get reflected in median family income? Since 2001, GDP has gone UP by 50% but median family income has barely budged. That's $5.5T! (half of that represents income) Where does the money go? And is there any way to affect the current distribution so that it actually affects family income?

Jul. 30 2014 09:55 AM

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