U.S. Economy Contracts

[buynholdisdead]

@Hawkwin

What is a few quarters of no sales compared to that?

If I was going to throw something in the trash but could get a dollar for it what do you think I am going to do?

[rainphakir]

@Hawkwin

Do you think they care as much about not selling as we care as much about paying more?

I would ask "do they care more about no income, losing homes, businesses, … And unable to buy food, shelter, family needs, etc …

Than “we” do about buying cheap stuff.

Jobless, STARVING people reportedly, act out violently. Civil unrest.

I think Xi n CCP care very much about preventing civil unrest.

TIG is driving this rollercoaster. I’m in a car way way in back… I have NO control.
I’m just trying to survive.

ralph

[buynholdisdead]

Here is a good discussion on the Tariffs with China.

Tom Sosnoff Reacts To The Internet’s Craziest Tweets

[syke6]

@rainphakir

would ask "do they care more about no income, losing homes, businesses, … And unable to buy food, shelter, family needs, etc …

Than “we” do about buying cheap stuff.

It isn’t just the cheap stuff though. Huge swathes of the American economy depend on inputs from China. An example is parts for higher end manufacturing. If you don’t have the parts, you can’t complete the finished product. Automakers, particularly Ford are in this boat. A huge percentage of aftermarket auto parts come from China, that means auto repairs will be more difficult and expensive. Parts stores like Autozone are vulnerable. Qualcomm relies heavily on imported Chinese chips. You can go on down the list. There will be plenty of people losing their jobs and businesses domestically, make no mistake.

We’re playing a global game of economic chicken. China is a dictatorship. We’re (for now) a democracy with a leadership who can’t stay on message and an election coming up in two years. TIG is probably the worst negotiator ever to hold the office of president. He’s already giving concessions without getting anything in return. He’s telegraphing weakness.

If I were Xi, I be doing exactly what he’s doing and hold firm. He’s betting he can handle the pain longer than we can. I get he’s right.

[Hawkwin]

@rainphakir

I would ask "do they care more about no income, losing homes, businesses, … And unable to buy food, shelter, family needs, etc …

I think you are being rather facetious if you think tariffs is going to result in China having a depression.

I think you are being naive in the extreme if you think some civil unrest is going cause China to change course.

[Hawkwin]

@buynholdisdead

Here is a good discussion on the Tariffs with China.

Solid stuff, thanks for sharing.

I love to hear contrary opinion. What better why to sharpen my argument (or change my mind), than to seek contrary input.

[buynholdisdead]

@Hawkwin

I love to hear contrary opinion. What better why to sharpen my argument (or change my mind), than to seek contrary input.

Exactly you have had some good insights, if the manufacturing moves to India and Vietnam because it is cheaper to produce then China is going to move up the value chain and compete more with us not less. With the attack on higher education and visa’s for students coming to the United States I think we are really knee capping ourselves right when we are in the race of our lives. We should want to support our higher education and bolster it to give us the edge we need in scientific studies.

[Leap1]

Chinese people may wnd up starving.

For someone to say they don’t care takes a bulling stereotype.

Factories in china are shutting down

[Leap1]

There is a pro here in this thread that is worthless.

https://www.axios.com/2025/05/01/trump-tariffs-ism-manufacturing

[mostlylong]

@Hawkwin

initial GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2025 is 2.4 percent on April 30.

Of course a lot can change in the next two months but GDPNow is forecasting a sold second quarter.

@mostlylong

With only 1 month into Q2, with not even 1 month of data (data will be lagged from the calendar), the Q2 forecast is probably quite rough.

Even the actual measure of GDP can be subject to large revisions

Apparently a lot can change in one day, as new data come in.

That +2.4% GDP growth forecast (yesterday) is all of a sudden +1.4% (today).

That +2.29% contribution from consumers is now +1.31%.

It seems the trend is lower GDP growth.

Just following the data, bodes poorly.

Latest estimate: 1.1 percent — May 01, 2025

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2025 is 1.1 percent on May 1, down from 2.4 percent on April 30. After this morning’s releases from the US Census Bureau and the Institute for Supply Management, the nowcast of second-quarter real personal consumption expenditures growth and real private fixed investment growth fell from 3.3 percent and 1.4 percent, respectively, to 1.9 percent and -0.7 percent.

@mostlylong

a big chunk of the Q2 positive growth, the current +2.4% forecast for Q2 GDP growth, comes from +2.29% in personal consumption.
…
Seems suspect to hang a forecast on consumer spending, given all of the other data we have seen lately (sentiment, measures of factory order and cargo slowdowns, etc).

[Leap1]

Linked above w no fanfare

The manufacturing sector in April shrank

https://www.axios.com/2025/05/01/trump-tariffs-ism-manufacturing

[DrBob2]

@Leap1

The manufacturing sector in April shrank

The Axios article made no mention of the fact that the ISM manufacturing index has been negative for almost all of the last two and half years. What does that mean?

DB2

[mostlylong]

@DrBob2

negative for almost all of the last two and half years. What does that mean?

It means executive policy is blowing up the economy on top of an already sluggish manufacturing segment.

[DrBob2]

@mostlylong

It means executive policy is blowing up the economy on top of an already sluggish manufacturing segment.

What is ‘executive policy’ and why did it change in 2022 (or did it)?

DB2

[mostlylong]

@DrBob2

@mostlylong

executive policy is blowing up the economy on top of an already sluggish manufacturing segment.

What is ‘executive policy’ and why did it change in 2022 (or did it)?

I think you’re being shy and playing possum.

You know exactly what I mean by executive policy and economy blowing up in our thread called “US economy contracts.”

Just like you know the meaning of this in regard to your comment on pull forward of imports.

@mostlylong

GDP would have been more negative without pull forward of inventory and equipment purchases.

that first quarter GDP was propped up by a $140 billion inventory build that boosted GDP by 2.25% while equipment orders similarly increased by 22%.

Together they bolstered first-quarter GDP by 3.1%. Neither of those will be repeated, though, creating a large drag in the current quarter.

[DrBob2]

@mostlylong

I think you’re being shy and playing possum.

I’m trying to get you to notice that negative ISM numbers have been the norm for 2-3 years and thus are related to a lot of things other than the last couple of months. Or, alternately, that the ISM numbers aren’t meaningful/significant for some reason.

Do you have an explanation for years of negative manufacturing ISM numbers while the economy hummed along? This despite, for example, the CHIPS act passed in August 2022.

DB2

[Leap1]

@DrBob2

I’m trying to get you to notice that negative ISM number

Two different contexts. Biden spent money going forward on industrializing further. Trump is tearing that down. Industrializing takes a minimum of two years for a factory to be built.

Doing the wrong thing is doing the wrong thing.

[buynholdisdead]

@DrBob2

I’m trying to get you to notice that negative ISM numbers have been the norm for 2-3 years and thus are related to a lot of things other than the last couple of months.

I am noticing they look to be negative in 2020 also but then in 2021 they started going positive and now they are back negative. Why is that?

[mostlylong]

@mostlylong

@DrBob2

What is ‘executive policy’ and why did it change in 2022 (or did it)?

I think you’re being shy and playing possum.

You know exactly what I mean by executive policy and economy blowing up in our thread called “US economy contracts.”

@DrBob2

I’m trying to get you to notice that negative ISM numbers

I knew it!

You did know exactly what I meant about that mysterious executive policy that is blowing up the economy in our thread on “US economy contracts”.

So, now let’s deep dive into historical ISM numbers?

I’m afraid I didn’t give a view on those and I don’t have much of a view on those at the moment.

I think I’m more focused on all of the exciting current events.

[DrBob2]

@mostlylong

I think I’m more focused on all of the exciting current events.

Which is fine, but don’t expect the ISM manufacturing numbers to be terribly indicative. As noted, they’ve basically been negative for over two years.

DB2