We’ve talked a bit about the economic numbers that came out this summer. In large part this is because the economy is in a transition period. After a seemingly unending drift (upward, but drifting nonetheless), the economy might, MIGHT, finally be sputtering to life. However, economic numbers can be tricky. Earlier this year, the GDP numbers unexpectedly showed a major contraction. Most analysts dismissed this as an abberition due to the harsh weather experienced in the Northeast during the first quarter. At the half way point of the year, the economy looked like it was at least heading in the right direction. When the second quarter numbers came out, they were pretty good, but there was fear that the revisions might not be so pleasant.
Revised Second Quarter GDP
In order to produce numbers for each quarter without a significant delay, economic reports are released based upon preliminary data. It is accepted that these numbers are likely to be revised later as economic figures that aren’t as readily available come in. Typically, the adjustments to numbers like the GDP are relatively small. Big adjustments are unusual and come with lengthy explanations about what went wrong. The final numbers are issued as “revised” data.
This week, the revised numbers for the GDP were released by the Commerce Department. As expected the revisions were not large, however, they were in a up direction. Most economists had expected a small revision downward. So, the good news is that the U.S. economy is still growing. The bad news is that there are concerns this growth is being overly anticipated and that there may be a stock market bubble forming. This is seldom good news. Also, the Federal Reserve is growing increasingly frustrated with a dysfunctional Washington that is not only doing nothing to help the U.S economy, but by both its actions and inactions, possibly actively harming the economy. The Fed can only do so much, and it is, quite frankly out of tools.
The end result is that as long as the natural economic cycle of growth and contraction continues forward without any unexpected bumps, we should eventually be fine. But, increasing instability in the global picture, or even worse, more political posturing and economic chicken from politicians in Washington D.C. could derail the whole thing, and the Fed would have few, if any tools left to help break the fall.
A debit card is a useful money management tool. It provides credit card-like access to purchases, but the money comes directly from your checking account, not from a line of credit. Many people prefer to use debit cards in order to avoid the pitfalls of credit cards. Some banks and credit unions even offer rewards […]
Over at MarketWatch recently, is an interesting article entitled Make Your Kid Rich for $1 a Day. I’ll let you go over there and read the particulars if you are interested. However, I think that the concept provides a great way to study the phenomenon of compound interest, and the elements that go into it. […]
Recently, the U.S. House of Representatives, the chamber controlled by the Republicans recently passed a bill that makes some changes and updates to the child tax credit. This was quickly spun as either a middle class tax cut, or raising taxes on the poor. It won’t pass anyway (what does in Washington these days) but […]
There is an article floating around on Marketwatch titled Parents You’re Paying for College Wrong. This kind of article is one of the reasons I write Finance Gourmet. After being a Financial Planner in Denver for several years (and, yes, I was a Certified Financial Planner), I saw a lot of different financial situations from […]
Here is an interesting infographic from Sallie Mae, the quasi-government entity that handles most federal student loans today. It goes with an upcoming post about financial articles and how people are supposedly paying for college “the wrong way.” While you’re at it, check out our article about opening a 529 plan account online to save […]
It seems that there is a never ending stream of economic data coming from all directions. Actually, that is true. However, it usually isn’t as dynamic as it has recently been. Typically, the economy moves in one direction, at one speed for a certain period and then adjusts and moves in a mostly predictable manner […]
By now, many people are familiar with the basic concepts of a 401k retirement savings plan. But, did you know there are different kinds of 401k plans? Do you know what a 457 plan is, or what its variation, the Roth 457 plan is? If you already have a good understanding of regular 401k plans, […]
Microsoft recently announced a big round of layoffs. According to reports, this is Microsoft’s biggest round of layoffs ever, at nearly 18,000 employees, all within the next year. Often, layoffs are all about Wall Street, rather than the company itself. Cutting jobs shows you are serious about cutting costs, which investors seem to care about […]
Each year, the IRS adjusts numerous tax numbers due to either tax law changes, or statutorily mandated adjustments. In several cases, these tax amounts are indexed to inflation so that they adjust automatically to keep up with inflation. In several cases, numbers are only modified for the current tax year when a certain limit or […]