3 Comments:

At 12:44 PM,  aznew said...

If you exclude growth from exports, however, which was powered by the weak dollar, the domestic economy did not perform so well, and was, I believe, in negative territory. The economy is probably weaker than this report lets on.

 

At 2:03 PM,  D.J. McGuire said...

Nice try, aznew, but imports are still far more numerous than exports.

 

At 6:10 PM,  aznew said...

d.j. - well, of course that is true. I was merely pointing out the effect on the GDP. But for the dollar being so weak, exports would have been lower, meaning that we would have produced fewer goods. The low dollar also makes imported goods more expensive and therefore less competitive, and increases GDP by requiring more domestic production. In that sense, the Fed (probably with the cooperation of the European and Japanese central banks, although that's not as clear) achieved one of its objectives (whether you agree with it or not) when it drove the value of the dollar down.

Separately, I'm guessing things will be looking up short-term. The stimulus will certainly have an effect. Don't be surprised, however, if the economy does a double dip in Q4 and beyond.

 

Post a Comment

Home