Monday, February 28, 2011

USA & Global Economy: Expansion Continued in February (GDP Charts) *Monthly Economic Review*


USA and Global Economy: Monthly Economic Review

USA & Global Economy: Expansion Continued in February

The immediate concern for both the USA and Global economy is high oil prices as a result of the Arab revolutions. The current economic expansion will be at risk if high oil prices persist into spring.

Although the Arab democracy movements, EU sovereign debt crisis, and USA deficits and increasing debt continue, both the USA and Global economy expanded onwards. Of course, all is not well: the USA financial system continues with problems and weaknesses, including a foreclosure fiasco and crisis, the USA unemployment and underemployment remains high, USA weekly unemployment claims continue at 400,000+, USA real estate is in a market depression, the USA cannot stop deficit spending therefore USA has an ever increasing national debt, USA local and state governments are in fiscal crisis, 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 years. However, the USA GDP has grown for 6 consecutive quarters through Q4 2010. Currently the risk of a double dip recession appears much diminished, if not totally nonexistent.

Below are February blog post headlines from Boom Doom Economy,  Financial Controls, and Baidu Planet summarizing select economic data and news, in approximately 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 February will now begin and should indicate continuing economic expansion. Q4 2010 was better than initially projected for the USA and Global economy. Whether the pace of the economic expansion will continue on to Q1 2011 or will slow is the concern now and is clouded by the high oil prices.

USA Positive Economic Data and News
=> USA Weekly Leading Index at 41-Week High! (Charts) *Annualized growth rate continues upwards*
=> USA Weekly Unemployment Claims Drop to 391K (Charts) *4-week average at Post-Great Recession low!*
=> USA Consumer Confidence at 3-Year High! (Charts) February: "Consumers more positive about the economy"
=> USA Monthly Leading Economic Index Up in January (Chart) "Still pointing to economic expansion in coming months"
=> Federal Reserve Raises USA GDP Projection for 2011 (Charts) *Unemployment rate estimate lowered for 2011*
=> USA Food & Retail Sales at All-Time High! (Chart) *January sales continue upward trend*
=> USA Industrial Production Dips in January (Charts) *Just below December post-recession high*
=> USA Consumer Sentiment at 8-Month High (Chart) *Further proof that the U.S. economy rebounding at stronger pace than expected*
=> USA Consumer Credit Increases in December (Charts) *Revolving credit increases first time since August 2008!*
=> USA Services Sector Growth at 66-Month High! (Chart) *Non-Manufacturing Index expands for 14th month*
=> USA Manufacturing PMI at 80-Month High! (Chart) *Economy expanded for 20th month*

USA Neutral and/or Negative Economic Data and News
=> Bank Failure Friday: FDIC Seizes 1 Bank (Charts) *2011 Totals: Failures 23, Cost $1.74 Billion*
=> USA 2010 Annual GDP Revised Downwards to +2.8% (Annual GDP Charts) *2009 GDP was -2.6%*
=> USA GDP Revised Downwards to +2.8% for Q4 2010 (Quarterly GDP Charts) *2010 Annual GDP Revised +2.9%*
=> USA Problem Bank List Increases to 884 (Charts) *FDIC Quarterly Banking Profile*
=> USA Unemployment Rate Drops to 9.0% (Charts) *Jobs growth only +36K in January*

Global Positive Economic Data and News
=> China Monthly Leading Economic Index Dips in December (Chart) "Chinese economy is unlikely to accelerate sharply in near term"
=> China Now Second Largest Economy in the World (Video, GDP Chart) *Surpasses Japan as #2*
=> China Manufacturing Continues Expansion (Chart) "Another upbeat PMI reading"
=> Global Economic Output at 57-Month High! (Chart) *January marks 18th month of expansion*
=> Global Services Sector Growth at 44-Month High! (Chart) *18th month of expansion*
=> Global Manufacturing PMI at 9-Month High (Chart) *19th month of expansion*

Global Neutral and/or Negative Economic Data and News
High oil prices as a result of the Arab revolutions could materially slow the economic expansion.

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% was a bounce upwards and the 2010 Q4 +2.8% continues the small, but inadequate, 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 (second 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 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 and the highest is +3.2% in Q4 2012 (2 years from now). No negative GDP quarters are projected nor on the graph.


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