Bureau of Economic Analysis
If you dig deeper into the report, you see however that this quarters numbers are buoyed somewhat by lower imports (which are subtracted from GDP). This is not necessarily a good sign. Gross domestic private investment was down at about a 50% annual rate. This is a truly staggering rate of decline and I wouldn't expect it to continue for too long outside of a Great Depression scale event (which this is not). In the words of Herb Stein, "Things that can't go on forever, won't."
Also the federal government's spending declined in this quarter. Whatever your opinions about it, I think we have reason to believe that may reverse itself in the coming months.
And finally, personal consumption actually picked up a little. Notably, consumption of durables rose for the first time since the 4th quarter of 2007. This is certainly encouraging.
However, don't get too excited just yet. In the last quarter, the early numbers showed a 3.8% decline that was later revised to 6.3%. As this chart from the St. Louis Fed shows, in the last few quarters, the revision from advance to preliminary has been the most important (preliminary to final has been pretty close).
So there may be some green shoots, but I'd wait a month (at least) before calling a bottom.
James Hamilton at Econbrowser has more along these lines.
Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- decreased at an annual rate of 6.1 percent in the first quarter of 2009, (that is, from the fourth quarter to the first quarter), according to advance estimates released by the Bureau of Economic Analysis. In the fourth quarter, real GDP decreased 6.3 percent.First, the good news. This decline is (slightly) smaller than the 6.3% decline in the 4th quarter of 2008. If these early numbers are correct, then we might expect things to be (slowly) improving.
If you dig deeper into the report, you see however that this quarters numbers are buoyed somewhat by lower imports (which are subtracted from GDP). This is not necessarily a good sign. Gross domestic private investment was down at about a 50% annual rate. This is a truly staggering rate of decline and I wouldn't expect it to continue for too long outside of a Great Depression scale event (which this is not). In the words of Herb Stein, "Things that can't go on forever, won't."
Also the federal government's spending declined in this quarter. Whatever your opinions about it, I think we have reason to believe that may reverse itself in the coming months.
And finally, personal consumption actually picked up a little. Notably, consumption of durables rose for the first time since the 4th quarter of 2007. This is certainly encouraging.
However, don't get too excited just yet. In the last quarter, the early numbers showed a 3.8% decline that was later revised to 6.3%. As this chart from the St. Louis Fed shows, in the last few quarters, the revision from advance to preliminary has been the most important (preliminary to final has been pretty close).
So there may be some green shoots, but I'd wait a month (at least) before calling a bottom.
James Hamilton at Econbrowser has more along these lines.
Credit Crisis
More on our friends at Healthcare Connections, currently doing a roaring trade flogging Tamiflu to people worried about swine flu – for a total consideration of around £60, compared to the £7.10 NHS prescription price. A reader gets in touch to say that the company's sales staff told him it could take several weeks to get the medication out to him once he parted with his cash. A little disappointing since Tamiflu is most effective when used during the first few days of infection.
Horlick feels the heat again
Another blow to Nicola Horlick, right, the City superwoman who looked a little less clever when it emerged that her fund management company, Bramdean, had taken a big hit from the Madoff affair. One of Bramdean's biggest shareholders, Elsina, controlled by the entrepreneur Vincent Tchenguiz, has now called an extraordinary general meeting of the company, in a bid to unseat its entire board.
Desperate times call for desperate measures
Do you think the posh grocer Whole Foods Market is struggling to get punters through the doors of its flagship outlet in Kensington High Street in London? Efforts to pull in a crowd seem to have been stepped up: the store is hosting a series of events, ranging from Cuban dancing shows to a lecture series on coping with allergies. There is even a "Free Salsa Class for Thirsty Thursday Customers". Given the price of some of its food, perhaps a seminar on how to do a full week's shop without giving your bank manager heart failure might be more appropriate.
Primark outfoxes the demonstrators
Primark hasn't got where it is today without some smart thinking. When executives discovered the opening of a new store in Tooting, south London, due today, was to be the target of a demonstration by War on Want, they acted quickly. An embarrassing scene was avoided by the simple trick of opening the store 24 hours early – the doors were thrown open yesterday morning.
Asia Helps Itself
There is nothing like a global crisis to give relevance to multilateral organizations. And nothing like China-Japan rivalry to breathe life — or at least money — into Asian regional cooperation.
So the annual meeting here this week of the Asian Development Bank has been a window into what Asia can do to help itself, and how enhanced regional cooperation can help the global economy both grow and avoid protectionism and division into blocs. But the meeting has also reflected deep concerns among Asian finance ministers about the difficulties of adjusting their economies to a changed world in which growth can no longer be led by exports to the West. Few of them displayed much faith this week in the durability of the current bounce in financial markets.
Two years ago, the ADB was searching for a role in an Asia that was growing fast with surplus savings, burgeoning foreign exchange reserves and easy access to capital. Now the bank finds itself in the position of being courted both as a focus of regional cooperation and as a source of funds to help Asian countries face the crisis. Middle income countries like Indonesia and the Philippines have come knocking on the bank’s door, looking for funds to boost government spending, particularly on infrastructure and for social safety nets as unemployment rises.
To meet demand, ADB member countries have agreed to a 200 percent increase in the bank’s ordinary capital resources and to speed up disbursements from its soft-loan Asian Development Fund for the poorest countries. Overall, ADB lending is aimed to increase by 50 percent over the next two years, to around $16 billion.