US Economy About To Boom? Data Suggests Strong Growth Coming!

[Economy 52,861]

http://www.ft.com/intl/cms/s/0/5bb7d4f4-344a-11e4-b81c-00144feabdc0.html

For a 7th month in a row job creation is expected at over 200,000... Manifacturing Indexes show continuing acceleration in expantion as well as the service sector.

The ISM and "Gauge Index" of the US economy suggests underlying strength and fundaments that could lead to GDP growing at an annualized rate of as much as 5% and increase average monthly job creation to 275,000+

Recent data suggests interest rates may have to be risen faster than originally expected in order to keep inflation in check and prevent economy from over-heating or imbalances from forming

[Dayman 6,251]

Hopefully - I'm in college right now so this would be great news.

[Prometheus 1,494]

Hopefully - I'm in college right now so this would be great news.

Same.

[FATCAT 60,888]

Hopefully - I'm in college right now so this would be great news.

[Economy 52,861]

Hopefully - I'm in college right now so this would be great news.

It may take another 3 to 4 years for the economy to be back to normal

 

The economy cant grow at 4% to 5% with current interest rates for very long without causing a lot of inflation and imbalances which can cause problems... So if the economy achieves strong growth like this and its maintained for several months straight they will HAVE to raise rates sooner than expected in which case growth will slow a bit

 

Id say 3% growth is gonna be the average over the next few years. Many economists agree

[Dayman 6,251]

It may take another 3 to 4 years for the economy to be back to normal

 

The economy cant grow at 4% to 5% with current interest rates for very long without causing a lot of inflation and imbalances which can cause problems... So if the economy achieves strong growth like this and its maintained for several months straight they will HAVE to raise rates sooner than expected in which case growth will slow a bit

 

Id say 3% growth is gonna be the average over the next few years. Many economists agree

I'm a freshman - so that's a perfect time frame.

[Economy 52,861]

I'm a freshman - so that's a perfect time frame.

lol thats assuming things go well

 

Financial Crisis and very severe recessions historically have been shown to take a long time to recover from. Over a decade usually

 

Not just because unemployment is high and wages stagnate for the longest time... but also because many companies went bankrupt and dont exist anymore. The companies that survived may expand to a degree but it takes time for new plants and companies to open up

 

Also the imbalances that created the crisis were pretty major and took a long time to correct.

 

I just hope thy dont take too long to raise interest rates. It could cause the same imbalances all over again and in 4 years time it will be 2008 all over again

[CaliLilMonster 476]

Hopefully - I'm in college right now so this would be great news.

I'm a freshman - so that's a perfect time frame.

[bionic 50,111]

Will a baby boom follow?

[Economy 52,861]

Will a baby boom follow?

lol who knows

The jobs report that came yesterday was really disapointing tho. Only 142,000 jobs for August vs estimate of 230,000.

That was the first bad month in 7 months tho so hopefully that was just hicup :yes:

[bionic 50,111]

lol who knows

The jobs report that came yesterday was really disapointing tho. Only 142,000 jobs for August vs estimate of 230,000.

That was the first bad month in 7 months tho so hopefully that was just hicup

 

Do you know what area the jobs are in?

[Economy 52,861]

Do you know what area the jobs are in?

im not sure. i dont think that data came out yet with specifications

 

Canada lost over 107,000 private sector jobs last month. 87,000 became self-employed and 10,000 Government jobs were added making the over-all loss 11,000

 

Thats was the worst monthly jobs report EVER since they started tracking this info in 1976

 

So the US by comparison not so bad

 

But month to month data is very volatile. You have to look back on data from the last 6-9 months to see what trends are really taking place

[Luc 4,776]

lol who knows

The jobs report that came yesterday was really disapointing tho. Only 142,000 jobs for August vs estimate of 230,000.

That was the first bad month in 7 months tho so hopefully that was just hicup

 

 

Lucky b---hes hopefully my country will follow soon. Improvement in the EU is too slow tbh... I think that the conservativeness of economic policies, the socialism and the Ukrainian crisis hurt and slowed down the economy a lot in Europe this summer. Luckily, the Euro went from 1.40-1.28$ or so. Hopefully this will cause some inflation.

 

Can you explain quantitative easing to me though? Like, the central bank buys assets and such from the government with money that doesn't exist?

[Cersei 56]

yaas everybody get rich

[Economy 52,861]

Lucky b---hes hopefully my country will follow soon. Improvement in the EU is too slow tbh... I think that the conservativeness of economic policies, the socialism and the Ukrainian crisis hurt and slowed down the economy a lot in Europe this summer. Luckily, the Euro went from 1.40-1.28$ or so. Hopefully this will cause some inflation.

 

Can you explain quantitative easing to me though? Like, the central bank buys assets and such from the government with money that doesn't exist?

they Central Bank prints money and buys up assets with it.

 

The most common thing for them to buy is Government Bonds which lowers yields and borrowing costs. But they sometimes also include a bit of mortgage backed securities or stocks as well

 

The difference with Quantitative Easing though is that the money printed isnt permanent. Once the bonds they bought mature, or if they choose to sell assets early etc, the money goes back into non-existance

 

Buying Government bonds (the main thing they buy with QE) lowers credit costs in the fixed income market for cheap credit especially for Government borrowing costs and helps increase inflation...

 

but once the economy is strong and the bonds mature (or if they choose to sell them early) the money goes back into non-existance so they cant remove inflation they created once the economy starts improving and natural inflation takes a hold on its own

 

If they simply printed money and gave it to the Government they would also support them but the currency would exist permanently and cause a lot of inflation once the economy improved and money velocity increased. There would be no way to removed the increased money supply. With Quantitative Easing they can remove the increased money supply as soon as inflation starts to get too high by simply selling the assets and taking liquidity and currency out of the system again!