Boom Doom Economy: January 2011

Monday, January 31, 2011

USA & Global Economy: Recovery Continued in January (GDP Charts) Monthly Economic Review

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USA & Global Economy: Manufacturing and Services Sectors Continued Expanding after the Summer Slump

USA & Global Economy: Recovery Continued in January

* Monthly Economic Review *

Although the EU Sovereign Debt Crisis continues, there is an Egyptian uprising, and also general discontent in the Arab World, both the USA and Global Economy showed continued economic recovery after the Summer Slump. Of course, all is not well: the USA financial system continues with problems and weaknesses, including a foreclosure fiasco and crisis, the USA unemployment rate remains high, USA weekly unemployment claims continue at 400,000+, the USA real estate is in a market depression, the USA cannot stop deficit spending, the USA has an ever increasing national debt, and the Federal Reserve continues quantitative easing aka monetizing and devaluing the U.S. Dollar. There does appear to be a Day of Reckoning for the USA on the horizon, although no one really knows when. The aftermath of the Credit Bubble and Great Recession will linger for a long time. However, the USA GDP is growing faster than projected and the risk of a double dip recession now appears much diminished, if not totally nonexistent.

Below are January blog post headlines from Boom Doom Economy, Financial Controls, and Baidu Planet summarizing select economic data and news, in reverse chronological order. This is not a comprehensive list of key economic data. It is selected economic data that gives a general idea of the overall economic conditions, with the exceptions noted in the preceding paragraph. Further below is the historical and projected USA GDP per the U.S. Bureau of Economic Analysis. Also further below is the projected GDPs for the USA, Japan, the Euro Area, and Total OECD per the latest OECD economic outlook. The economic data for January will now begin and should indicate continuing economic recovery and expansion. Q4 2010 has been a better than initially projected quarter for the USA and Global Economy. Whether the pace of the economic recovery will continue on to Q1 2011 or will slow is the concern now.

USA Positive Economic Data and News
USA 2010 Annual GDP Estimated at +2.9% (Annual GDP Chart) *2009 GDP was -2.6%*
USA GDP Q4 2010 Estimated at +3.2% (Quarterly GDP Charts) *2010 Annual GDP +2.9%*

USA Weekly Leading Index at 6-Week Low (Charts) *Growth rate at 3-week low*
USA Consumer Confidence at 8-Month High! (Chart) "Consumers have begun the year in better spirits"
USA Industrial Production at 28-Month High! (Charts) *16th monthly increase in past 18 months*
USA Monthly Food & Retail Sales at All-Time High! (Charts) *December sales continue upward trend*
USA Unemployment Rate Decreases to 9.4% (Charts) *103K jobs created in December*
USA Non-Manufacturing Index Pops +2.1% in December (Chart) *At post-Great Recession high, 12th month of expansion*
USA Manufacturing PMI Up in December! (Chart) *7-month high, 17th month of expansion*

USA Neutral and/or Negative Economic Data and News

Bank Failure Friday: FDIC Seizes 4 Banks (Charts) *2011 YTD: Failures 11, Cost $1.19 billion*
USA Weekly Unemployment Claims Surge to 454K (Charts) *Highest since October*
Federal Reserve: USA Economic Recovery Is Continuing (GDP Chart) *Insufficient for significant improvement in labor market*
USA Consumer Sentiment Drops in January (Charts) *Rising gasoline prices dampen mood*
USA Total Consumer Credit Increases for 2nd Month (Charts) *Revolving credit down 27th consecutive month*
Federal Reserve Releases December FOMC Minutes (Video) *USA economic recovery not decreasing unemployment*

Global Positive Economic Data and News

World Productivity Returned in 2010 (GDP Charts) *Projected slightly lower in 2011*

Global All-Industry Output Index at 8-Month High (Chart) *Global GDP growth accelerates*

Global Services PMI at 41-Month High! (Chart) "Important momentum & balance to global recovery"

Global Manufacturing PMI Up in December! (Chart) "Robust improvement in overall operating conditions"

Global Neutral and/or Negative Economic Data and News

Global Sovereign Risk: The Top 10 Most Risky Nations (Lists) *Q4 2010 Credit Risk Report*

USA Earnings Season Q4 2010

Earnings season started in January for Q4 2010. Below are related blogs post headlines from Osprey Flyer, Financial Controls, Matrix Markets, Google Investor, and Apple Reporter. This is not a comprehensive list of companies, of course, but a selected list yet some are considered bellwether corporations for their particular sector. Overall, the corporate earnings season has been good, if not very good. No overall weaknesses via quarterly earnings reports in any sectors suggest the USA economy recovery is faltering or stalling. Some banks in the financial sector continue struggling from the 2008 USA Financial Crisis.

Positive Corporate Earnings

Microsoft Reports Record Earnings per Share in Q4 (Financial Charts, Review) *Lower gross margin only negative* MSFT

Google Reports Excellent Q4 Earnings (Financial Charts, Review) *Another record-setting quarter!* GOOG

Apple Reports Legendary Financial Results! (Financial Charts, Review) *Record revenues & earnings; margins increase!* AAPL

Wells Fargo Reports Improved Earnings in Q4 (Financial Charts, Review) *Credit losses continue decreasing* WFC

VMware Reports Record Earnings in Q4 (Financial Charts, Review) *Outlook disappoints* VMW

JPMorgan Reports Good Q4 Financial Results (Financial Charts, Review) *EPS $1.12* JPM

Intel Reports Excellent Q4 Financial Results (Financial Charts & Review) *EPS $0.59* INTC

Neutral and/or Negative Corporate Earnings

S&P 500 Drops on Egyptian Uprising (Charts) *Economic news, corporate earnings pushed aside*

Bank of America Reports Huge $1.2 Billion Loss (Financial Charts, Review) "Headwinds still remain" BAC

Morgan Stanley Reports Modest Q4 Improvement (Financial Charts, Review) *EPS $0.41* MS

Goldman Sachs Reports Mixed Q4 Earnings (Financial Charts, Review) *Revenues down, Earnings up* GS

Citigroup Reports Lackluster Q4 Earnings (Financial Charts, Review) *EPS $0.04* C

USA GDP by Quarter

USA GDP % by Quarter (Chart) The chart below is the annualized percentage change of the GDP (seasonally adjusted at annual rate) from the preceding quarter (QoQ), the most common GDP measure. As can be seen, there was a negative dip into the Great Recession beginning 2008 Q2, a rebound peaking in 2009 Q4, a downward trend in 2010 Q1 and Q2. The USA economy appeared to be at a crossroads at 2010 Q2: a continuing downwards trend towards zero growth or a bounce upwards from there? The 2010 Q3 +2.6% (third estimate) was a bounce upwards and the 2010 Q4 +3.2% continues the uptrend. The Federal Reserve via the Federal Open Market Committee has resorted to QE2, a second round of quantitative easing, plus indirect quantitative easing in an attempt to boost the economy, increase the GDP, and bring down the unemployment rate. The chart covers the last 24 quarters of the USA GDP as reported by BEA from 2005 Q1 through 2010 Q4 (advance estimate).

OECD: GDP Growth Projections by Quarter

OECD: GDP Growth Projections by Quarter (Chart) Below is the OECD GDP Growth Projections by Quarter for the USA, Japan, the Euro Area, and the entire OECD. These are annualized percentage growth rates. The chart is for 10 quarters, from Q3 2010 through Q4 2011. The USA lowest quarter is +1.9% in Q4 2010 (now) and the highest is +3.7% in Q4 2012 (2 years from now). The Japan lowest quarter is +0.6% in Q2 2011 and the highest is +2.7% in Q1 2011 (next quarter). The Euro Area lowest quarter is +1.3% in both Q4 2010 (now) and Q1 2012 (next quarter). The highest quarter is +2.2% in both Q3 2012 and Q4 2012 (2 years from now). The Total OECD lowest quarter is +1.7% in Q4 2010 (now) and the highest is +3.2% in Q4 2012 (2 years from now). No negative GDP quarters are projected nor on the graph.

Links

Boom Doom Economy

USA & global economic news & analysis. There is always good/bad economic news, no matter how good/bad times are.

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USA financial system, banking, Federal Reserve, USA & global economic news.

Baidu Planet

China economic & technology news. Baidu (BIDU) financial performance & stock analysis.

More Charts and Analysis!

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USA and Global economic charts and review

Apple Digest

Apple (AAPL) financial performance and stock charts

Google Investor

Google (GOOG) financial performance and stock charts

Osprey Flyer

Microsoft (MSFT) financial performance charts

Intel (INTC) financial performance charts

VMware (VMW) financial performance charts

SalesForce.com (CRM) financial performance charts

Financial Controls

USA failed and problem banks

Federal Reserve statistical releases

JPMorgan Chase & Co. (JPM) financial performance charts

Citigroup (C) financial performance charts

Goldman Sachs (GS) financial performance charts

Wells Fargo (WFC) financial performance charts

Bank of America (BAC) financial performance charts

Morgan Stanley (MS) financial performance charts

Matrix Markets

S&P 500 (SPX) charts and review

Baidu Planet

China economic, Internet, and technology news

Baidu (BIDU) financial performance & stock analysis

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Global economic news, observations, & perspective, with emphasis on USA. There is always good/bad economic news, no matter how good/bad times are.

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Friday, January 28, 2011

USA 2010 Annual GDP Estimated at +2.9% (Annual GDP Chart) 2009 GDP was -2.6%

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Bureau of Economic Analysis: USA Annual GDP Estimate

USA 2010 Annual GDP Advance Estimate +2.9%

Official Statement by the Bureau of Economic Analysis is at bottom of this post.

USA Annual 2010 GDP Advance Estimate The Bureau of Economic Analysis released the Advance Estimate of 2010 Annual GDP which was +2.9%, for a total GDP of $14.66 trillion. The advance estimate of the Annual 2010 GDP is a +5.5% improvement over the 2009 Annual GDP of -2.6%. The 2010 Annual GDP is the highest since 2005 (+3.1%). The USA GDP had decreased for 4 consecutive years (2006 through 2009) before this increase in 2010.

GDP +3.0% A +3.0% annualized GDP growth rate is generally accepted as the minimum necessary to generate some jobs growth. Therefore, the USA economy grew at a rate in Q4 2010 to create some jobs and bring down the unemployment rate. The Big Question: where is the USA economy headed? Three scenarios are usually discussed: 1) a double dip recession whereby the GDP will turn negative, 2) the economy will continue "bottom bouncing" with very slow growth and a continuing high unemployment rate (i.e., less than or near +3.0% growth), or 3) the bottom is in and GDP growth will accelerate to above +3.0% and continue above, jobs will be created, and the unemployment will continue to decrease. Scenario 2) with USA slow economic growth appears to be the consensus for 2011.

USA GDP % by Year (Chart) The chart below is the annualized percentage change of the GDP (seasonally adjusted at annual rate) from the preceding year (YoY), the most common annual GDP measure. As can be seen, there was a dip in 2001 to +1.1%. The USA economy then recovered to a peak of +3.6% in 2004. Five consecutive annual declines ensued culminating in the Great Recession and a cyclical bottom in 2009 at -2.6%. 2008 was 0.0% and shows as a blank on the chart. The chart covers the last 16 years of the USA GDP as reported by BEA from 1995 through 2010 (advance estimate).

The Bureau of Economic Analysis Commentary on the 2010 GDP of +2.9% (Advance Estimate)

2010 GDP

Real GDP increased 2.9 percent in 2010 (that is, from the 2009 annual level to the 2010 annual level), in contrast to a decrease of 2.6 percent in 2009.

The increase in real GDP in 2010 primarily reflected positive contributions from private inventory investment, exports, personal consumption expenditures (PCE), nonresidential fixed investment, and federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.

The upturn in real GDP primarily reflected upturns in exports, in nonresidential fixed investment, in PCE, and in private inventory investment and a smaller decrease in residential fixed investment that were partly offset by an upturn in imports.

The price index for gross domestic purchases increased 1.3 percent in 2010, in contrast to a decrease of 0.2 percent in 2009.

Current-dollar GDP increased 3.8 percent, or $540.2 billion, in 2010. In contrast, current-dollar GDP decreased 1.7 percent, or $250.1 billion, in 2009.

During 2010 (that is, measured from the fourth quarter of 2009 to the fourth quarter of 2010), real GDP increased 2.8 percent. Real GDP increased 0.2 percent during 2009. The price index for gross domestic purchases increased 1.2 percent during 2010, compared with an increase of 0.5 percent during 2009.

More Charts and Analysis!

Boom Doom Economy

USA and Global economic charts and review

Apple Digest

Apple (AAPL) financial performance and stock charts

Google Investor

Google (GOOG) financial performance and stock charts

Osprey Flyer

Microsoft (MSFT) financial performance charts

Intel (INTC) financial performance charts

VMware (VMW) financial performance charts

SalesForce.com (CRM) financial performance charts

Financial Controls

USA failed and problem banks

Federal Reserve statistical releases

JPMorgan Chase & Co. (JPM) financial performance charts

Citigroup (C) financial performance charts

Goldman Sachs (GS) financial performance charts

Wells Fargo (WFC) financial performance charts

Bank of America (BAC) financial performance charts

Morgan Stanley (MS) financial performance charts

Matrix Markets

S&P 500 (SPX) charts and review

Baidu Planet

China economic, Internet, and technology news

Baidu (BIDU) financial performance and stock charts

Visit Osprey Port News Network!

Apple, Google, Baidu, China, technology, financial system, stocks, markets, economy, science, environment, future

Follow Boom Doom Economy (@BoomDoomEconomy) on Twitter!

Global economic news, observations, & perspective, with emphasis on USA. There is always good/bad economic news, no matter how good/bad times are.

♦♦♦

USA Weekly Leading Index at 6-Week Low (Charts) Growth rate at 3-week low

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ECRI: Economic Weekly Leading Index and Annualized Growth Rate

USA Economic Weekly Leading Index Drops to 6-Week Low

USA WLI Annualized Growth Rate Drops to 3-Week Low

The Weekly Leading Index page has been updated with the latest report by the Economic Cycle Research Institute for the week ended January 21, 2011. The related charts (Weekly Leading Index and Annualized Growth Rate) have also been updated. A video of an interview with Lakshman Achuthan, Managing Director of ECRI, discussing no double dip recession and no rapid recovery, has also been included. Mr. Achuthan did comment on the data last week, for the week ending January 7, 2011, "With WLI growth rising for ten straight weeks to a 33-week high, U.S. economic growth will soon begin to revive."