Economy is worse off than we thought.

[durangodawood]

I eat a lot of rice and beans not to be frugal but because I really like it. A little hot sauce, add cornbread, and I'm good. I did start making rice and beans in school because I was broke, but I've never lost the taste for them. Seriously, I probably make a pot of brown beans (pintos) a week.

Really good rice and beans is great, I agree. Healthy and cheap too.

 

[bèlla]

My post went from serious to silly over the course of a sentence.

I do believe we acquire too much stuff overall. Too much for our own health and the health of our world. But I also believe in eating well and having the resources to afford various fun experiences.

I know the post was lighthearted.

Some are guilty of overconsumption and others aren’t. Minimalism was trendy for a time and now it’s required due to constraints for many. But much like you I believe in balance and that isn’t something I can define for others. Which is why I don’t address overconsumption very often. I’m not inclined to tell anyone how to spend their resources or how much is enough.

~bella

 

[Laeomis]

Consumer spending and GDP are two different tools that are used to measure inflation. Consumer spending is at first seen as something wanted, but in reality it goes both ways. Consumer spending does not necessarily mean consumers are buying more, but it might mean they are spending more on the same amount of items. This is exactly was has happened over the past 5 years, and when the news does not give the whole information, then they are being deceptive.

As you can see from the numbers coming from the U.S. Bureau of Labor Statistics, prices have increased for consumers. It is deceptive to say consumption has increased, when consumers are just paying more for it........ CPI stands for Consumer Price Index.

 

[bèlla]

I eat a lot of rice and beans not to be frugal but because I really like it. A little hot sauce, add cornbread, and I'm good. I did start making rice and beans in school because I was broke, but I've never lost the taste for them. Seriously, I probably make a pot of brown beans (pintos) a week.

I like legumes as well but I don’t eat them every week and you’re southern. That plays a part. ;-)

~bella

 

[durangodawood]

....I’m not inclined to tell anyone how to spend their resources or how much is enough.

~bella

I would definitely take care about admonishing specific people - or not do it at all. Its sensitive, and you never know what particular circumstances any individual is facing. But I do feel pretty confident in diagnosing this societal problem.

 

[bèlla]

I would definitely take care about admonishing specific people - or not do it at all. Its sensitive, and you never know what particular circumstances any individual is facing. But I do feel pretty confident in diagnosing this societal problem.

I see a lot of comments along these lines on social media and the majority aren’t good intentioned but I don’t think that’s the case where you’re concerned. It’s become a form of policing of sorts and women do it often to one another. They’re crashing out over minor things like ingredients and it’s increased a lot since the pandemic. I don’t know if the same is true for men or not. But I find it strange.

This video appeared on my reels yesterday and I was trying to see the tool she used up close. I’m familiar with her content and the process mirrors the French approach for doing the same. The comments are ridiculous and exemplify what I described. Back in the day we would have seen questions, a recipe request or link for the rolling pin.

~bella

 

[iluvatar5150]

The latest estimate showed that consumer spending — the lifeblood of the US economy — was tepid in the beginning of the year. Spending in the first quarter grew at a rate of just 0.5%, down from 1.2% in an earlier estimate. That’s the weakest rate in more than four years.



While there has certainly been a downturn, I'm assuming their qualifier of "in the past 4 years" was no accident in order to make the issue seem worse than what it is.

Disclaimer, yes the estimates of 0.5%-1.2% still represent a drop of no matter what....


However, if you lay that out next to the 4 years that included the post-Covid reopening spending boom, it's going to look even worse.


View attachment 366812

Vs.
View attachment 366813



That'd be sort of like saying "the growth rate of dining out has dropped to it's lowest level since 2021"...well yeah, because the growth rate is going to be huge in the period where restaurants went from closed to open... but that growth rate obviously will taper down.

Neither the numbers you posted, nor the data from the years in between support your hypothesis.

Your contention would only make sense if they were describing the magnitude of the difference between Q1 2025 and, say, 2021 - i.e. if they'd said something like "the growth in Q1 2025 was less than half the rate of growth of any time in the last 4 years." But they didn't. They only said that Q1 2025 was "worse", which is true. Ignoring the covid period, Q1 2025 had slower growth in consumer spending than any quarter since Q2 2011. And it's not since 2009 when we had multiple quarters below that number.

A more likely explanation for the 4 year window they used is that it allows them to ignore the covid anomaly altogether. It's much easier to say "it's the slowest it's been in the last 4 years" than it is to say "it's the slowest it's been in the last 14 years, except for 20-21, when everything was whipsawing and ought to be ignored anyways".

 

[ThatRobGuy]

Neither the numbers you posted, nor the data from the years in between support your hypothesis.

Your contention would only make sense if they were describing the magnitude of the difference between Q1 2025 and, say, 2021 - i.e. if they'd said something like "the growth in Q1 2025 was less than half the rate of growth of any time in the last 4 years." But they didn't. They only said that Q1 2025 was "worse", which is true. Ignoring the covid period, Q1 2025 had slower growth in consumer spending than any quarter since Q2 2011. And it's not since 2009 when we had multiple quarters below that number.

A more likely explanation for the 4 year window they used is that it allows them to ignore the covid anomaly altogether. It's much easier to say "it's the slowest it's been in the last 4 years" than it is to say "it's the slowest it's been in the last 14 years, except for 20-21, when everything was whipsawing and ought to be ignored anyways".

But the covid spending boom was still happening well into 2023.

Drivers of Post-COVID Private Consumption in the U.S.

Private consumption in the U.S. has recovered swiftly from the pandemic trough and has been running above the pre-pandemic trend even as interest rates rose sharply. This paper examines the underlying drivers for this strong growth in consumption. Using both state- and household-level data, we...

www.elibrary.imf.org

They attribute that to a few things.

The "pent up demand" was still present into Q2/Q3 of 2023 (though it had moderated as savings started to diminish)

Remote/Hybrid work was still in effect for much of that period (less money spent on gas and commuting to work and daycare, means more money to spend on consumer goods)

"Return to office" mandates didn't start really ramping up until late 2023, at which point, people had to start spending more money on transportation and childcare again.

 

[The Barbarian]

The president is not trying to ruin the economy,

It's incompetence, not a conscious effort to destroy America.

 

[iluvatar5150]

But the covid spending boom was still happening well into 2023.

Drivers of Post-COVID Private Consumption in the U.S.

Private consumption in the U.S. has recovered swiftly from the pandemic trough and has been running above the pre-pandemic trend even as interest rates rose sharply. This paper examines the underlying drivers for this strong growth in consumption. Using both state- and household-level data, we...

www.elibrary.imf.org

They attribute that to a few things.

The "pent up demand" was still present into Q2/Q3 of 2023 (though it had moderated as savings started to diminish)

Remote/Hybrid work was still in effect for much of that period (less money spent on gas and commuting to work and daycare, means more money to spend on consumer goods)

"Return to office" mandates didn't start really ramping up until late 2023, at which point, people had to start spending more money on transportation and childcare again.

Fuel and services are included in the main PCE numbers, so if people were merely shifting dollars from one bucket to another, it wouldn't affect the total.

There was some "excess" government spending into 2023, but regardless, the Q1 2025 number is still low relative to the decade preceding covid.

 

[Laeomis]

It's incompetence, not a conscious effort to destroy America.

The president has the best interest of America in heart, but he's not perfect. The way the mainstream media twists the actual science of certain issues, like the economy, reminds me of the time when king Ptolemy IV was driven mad by God, and made the war elephants drunk with wine mingled with frankincense to trample to Jews to death. Instead, the elephants turned on the king's army (New Revised Standard Version, 3 Maccabees, chapter 5 & 6). This is like the news trying to raise the population into a drunken, lying and drug infused riot, and it's going to turn on them, and they will end up being trampled by their own devices.

Rothbart, Z. (2020, October, 12). Salvation from 500 drunken killer elephants: The other Maccabee story. the Librarians.

Salvation from 500 Drunken Killer Elephants: The Other Maccabee Story

The Librarians | The National Library of Israel

blog.nli.org.il

 

[The Barbarian]

This is like the news trying to raise the population into a drunken, lying and drug infused riot

 

[Trogdor the Burninator]

People buy too many things as it is.

They should buy used stuff more, repair things when theyre worn out, stay home, eat rice and beans, quit the streaming services and read the Bible by candlelight in the evening.

Also, they should build more barns. Nothing like a good barn-raisin' to bring folks together.

 

[NxNW]

It's incompetence, not a conscious effort to destroy America.

Hanlon's Razor strikes again

 

[FireDragon76]

FYI, the plan is not to expand the U.S. economy, but to contract it. GDP is not a completely good measure to measure the U.S. economy with. In fact, a high GDP might not mean that the economy is better off, but worse off. This is because GDP measures the price of which products are sold, and not the quantity. This means high inflation. Inflation was sky-high since the pandemic.

During the pandemic inflation was artificially caused in order to combat the recession. GDP raised, but the not the quantity of goods sold, but the price was raised. This is done by pushing production past its potential. In an economy, production cannot go past a certain point that is determined by a nation's technology. This point is known as the the production potential, or the long run aggregate supply curve (LRAS). If production is pushed past this point, then the price of goods raise, but quantity does not raise. At this point the national supply curve is vertical, asymptote, and only the price of goods will rise, not the quantity. This was done on purpose to raise prices and fight the predicted recession from the pandemic. Now that we are in a conservative administration, the plan has changed.

Conservatives believe in contractionary policies, lowering prices and inflation. In order to fight inflation, GDP must be lowered below the LRAS potential point. There is an economic concept called the Phillip's Curve, and this curve says that as unemployment rises, inflation falls. As inflation falls so do prices. Raising taxes (tariffs) and cutting government spending are all ways to lower production, and inflation. Consumer spending must also stop. These economical laws and theories are very paradoxical, but in the long run are for the best.

Here is a graph showing how GDP within the last 5 years has been artificially raised by pushing production past its potential in order to raise prices. More products were not produced, but the price was raised, which means higher GDP. This is not exactly good for the economy. It is a technique to combat recession.

Data comes from the U.S. Bureau of Economic Analysis.
View attachment 366814

Here is the concept of the LRAS curve, and how it becomes vertical. If production is pushed along the vertical curve, then only prices will raise, but quantity will not. Quantity is measured on the horizontal axis, and price is measured on the vertical axis of the graphs. LRAS is the long run aggregate supply curve, and AD is the aggregate demand curve for a whole nation.

View attachment 366815

This sounds like more voodoo economics.

 

[FireDragon76]

People buy too many things as it is.

They should buy used stuff more, repair things when theyre worn out, stay home, eat rice and beans, quit the streaming services and read the Bible by candlelight in the evening.

Amish Paradise?

 

[Larniavc]

If production is pushed past this point, then the price of goods raise, but quantity does not raise.

Why does this happen? It seems counterintuitive.

 

[Larniavc]

Yeah, like the need for safe spaces due to imaginary things.

This website is save space for many people. Is that a bad thing?

 

[durangodawood]

Amish Paradise?

Ive found my people!

 

[The Barbarian]

I eat a lot of rice and beans not to be frugal but because I really like it.

Just the other night, we had pork belly, black-eyed peas, and rice. Don't see how anyone would think of that as poor food.