American Economics Thread

In4ser

In4ser

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The US has previously defaulted on its debts three times in 1933 when FDR seized the people’s gold, 1971 when we stopped full convertibility of USD to gold, 1979 on because of a glitch. One could argue they are also technically defaulting ever time they raise the debt ceiling by printing more money and passing inflation onto the American people

With US Debt to GDP is at 133% that’s it’s become difficult to service it’s costs especially with higher interest rates. It could print more money but inflation is still a concern and it would require even higher interest rates to counteract it.
 
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Chevalier

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luminary said:
class warfare
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The US solution to reducing inflation is to impoverish the American people. Americans then having to resort to sex work to cater to aging US elites is a positive side benefit as seen in the UK.

All this because the US can no longer get china to lend them any more money via treasury purchases, since they’ve proven that they will outright steal national assets of adversaries, as they did to Russia the year prior.
 
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Stierlitz

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The outlook for the U.S. economy in 2023 looks somewhat better now than it did three months ago, according to 37 forecasters surveyed by the Federal Reserve Bank of Philadelphia. The forecasters predict the economy will expand at an annual rate of 0.6 percent this quarter and 1.0 percent in the second quarter of 2023, up from the previous predictions of 0.2 percent in each quarter. On an annual-average over annual-average basis, the forecasters expect real GDP to increase 1.3 percent in 2023, up from the projection of 0.7 percent in the survey of three months ago.

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Deleted member 23272

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Stierlitz said:
The outlook for the U.S. economy in 2023 looks somewhat better now than it did three months ago, according to 37 forecasters surveyed by the Federal Reserve Bank of Philadelphia. The forecasters predict the economy will expand at an annual rate of 0.6 percent this quarter and 1.0 percent in the second quarter of 2023, up from the previous predictions of 0.2 percent in each quarter. On an annual-average over annual-average basis, the forecasters expect real GDP to increase 1.3 percent in 2023, up from the projection of 0.7 percent in the survey of three months ago.

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In general it looks like recession fears are declining across the board.

Which is good because let's face it, our side keeps going on about the folly of decoupling, which is true, but the flipside is a completely struggling America does not bode well either for China or the world due to the globalized nature of our planet. Take one of the obvious about how inflation, yes did hurt the average American and made Biden extremely unpopular, but it also lead to the strengthening of the dollar worldwide which inflated its nominal GDP and lead to the weakening of other currencies including the Yuan. Not to mention trade benefits both sides, and China will need trade in order rebound from the economic slump of 2022.

In the end, what we have is a fascinating century where both sides have to do a delicate dance of preserving the current system enough so that thing's don't fall apart, but also preparing for war.
 
S

Stierlitz

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US Inflation Rate Falls Less Than Expected


The annual inflation rate in the US slowed only slightly to 6.4% in January of 2023 from 6.5% in December, less than market forecasts of 6.2%. Still, it is the lowest reading since October of 2021. A slowdown was seen in food prices (10.1% vs 10.4%) while cost of used cars and trucks continued to decline (-11.6% vs -8.8%). In contrast, the cost of shelter increased faster (7.9% vs 7.5%) as well as energy (8.7% vs 7.3%), with gasoline prices rising 1.5%, reversing from a 1.5% decline in December. On the other hand, both fuel oil (27.7% vs 41.5%) and electricity prices slowed (11.9% vs 14.3%). Although inflation has shown signs of peaking at 9.1% in June last year, it remains more than three times above the Fed's 2% target and continues to point to a broad-based advance on the general price level, particularly services and housing. Compared to December, the CPI rose 0.5%, the most in three months, mostly due to the higher cost of shelter, food, gasoline, and natural gas. source: U.S. Bureau of Labor Statistics​

 
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HighGround

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Stierlitz said:
US Inflation Rate Falls Less Than Expected


The annual inflation rate in the US slowed only slightly to 6.4% in January of 2023 from 6.5% in December, less than market forecasts of 6.2%. Still, it is the lowest reading since October of 2021. A slowdown was seen in food prices (10.1% vs 10.4%) while cost of used cars and trucks continued to decline (-11.6% vs -8.8%). In contrast, the cost of shelter increased faster (7.9% vs 7.5%) as well as energy (8.7% vs 7.3%), with gasoline prices rising 1.5%, reversing from a 1.5% decline in December. On the other hand, both fuel oil (27.7% vs 41.5%) and electricity prices slowed (11.9% vs 14.3%). Although inflation has shown signs of peaking at 9.1% in June last year, it remains more than three times above the Fed's 2% target and continues to point to a broad-based advance on the general price level, particularly services and housing. Compared to December, the CPI rose 0.5%, the most in three months, mostly due to the higher cost of shelter, food, gasoline, and natural gas. source: U.S. Bureau of Labor Statistics​

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It's better to post the full report, which is
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.

Key graphs to look at.

1676401689021.png
It'll be interesting to see how the Fed will react to stabilizing energy prices. Which are the categories of most interest to me? I think Shelter's stubborn refusal to go down is probably the most notable. Prices continue to stubbornly increase despite ever-rising interest rates.

On the one hand, wage growth
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, but on the other, interest rates are making it considerably more expensive to service new loans/debt. Logically, this should result in prices stagnating or dropping, which is visible to some
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, but the price hasn't really moved in the direction that I personally would like to see. I.E. prices have largely stopped growing on single-family housing, but the rise in interest rates make these home more expensive to buy, even if the price is slightly lower.

Rents have also started to stagnate, but really, we have to keep in mind that development and re-development has also slowed. So what we are seeing, is a
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in both supply and demand, which doesn't make things better. What we want to see, is an expansion in housing supply.

All in all, inflation is continuing to stabilize. It's significantly lower than it was months ago, but the puzzle of America's housing is no close to being solved.
 
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HighGround

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pipaster said:
Re stabilizing fuel prices. Another release of 26 million barrels. This obviously can't continue in perpetuity.

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No it can't. And it's doubtful that it can last more than a year or two years at most. Here's the inventory in the SPR for reference.

1676403069983.png
Note the enormous drop in just a year of "subsidizing" the fuel prices. I mean there are a lot of things US can do to alleviate the oil supply. Like lifting sanctions off Venezuela, Iran, Russia... So on and so forth. But what it comes down to really, is whether the oil prices will stabilize at a low price faster than the SPR start running out. Depending on the price situation this Spring/Summer, U.S. could actually start filling up the SPR.

So we'll see, but energy prices will obviously be a key metric to watch. It has a significant effect on every economy on Earth, but in particular, for the largest energy consumers in the world. China and United States.
 
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Stierlitz

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Retail sales in the US unexpectedly jumped 3% month-over-month in January of 2023, the biggest increase since March of 2021 and way above market forecasts of a 1.8% rise. It follows a 1.1% drop in December. Biggest rises were seen in sales at department stores (17.5%), food services and drinking places (7.2%), motor vehicles and parts (5.9%), furniture stores (4.4%), electronics and appliances (3.5%), miscellaneous stores (2.8%) and clothing (2.5%). On the other hand, sales at gasoline stations were flat. Excluding autos, sales increased 2.3% and excluding gas and autos 2.6%. The so-called core retail sales which exclude automobiles, gasoline, building materials and food services and relate more with the consumer spending component of GDP, were up 1.7%. The data showed that consumer spending remains robust after a slowdown last year, amid a strong labour market, wage growth and signs of easing inflationary pressures. Retail sales aren’t adjusted for inflation. source: U.S. Census Bureau​

 
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