Cognitive Dissonance…

The New York Times reports this morning on the latest U.S. GDP figures:

Growth Accelerates, but U.S. Has Lots of Ground to Make Up

 The American economy picked up a little steam last quarter, growing at its fastest pace in a year and a half. Whether it can sustain that momentum is critical to millions of Americans out of work — and perhaps President Obama’s re-election chances…

 

But Nomura Securities analysts looked at the same glass and saw it decidedly half-empty, as Business Insider reports:

Core Economic Growth Slowed Sharply In Q4

In regards to this morning’s mediocre GDP report, Nomura cuts right to the chase in a note titled ‘Core Economic Growth Slowed Sharply’ in Q4.

Here’s their commentary:

Inventory building contributed 1.9 percentage points (pp) to growth in Q4 2011 after subtracting 1.4pp in Q3. The measure of final sales, which is a “core” view of the economy that removes the effect of inventories, grew at an annual rate of just 0.8% in Q4 compared with 3.2% in Q3. Under this perspective, the US economy slowed sharply in the final quarter of the year. The choppiness in quarterly growth in the back half of 2011 is partially due to the rebound following the dampening effect on economic growth stemming from the Japan earthquake and tsunami that hit on 11 March. The second half rebound was front-loaded into Q3. The same pattern can be seen when looking at the industrial production data, which also tracks the broad economy. In Q3, industrial production rebounded to an annual growth rate of 6.3% (following 0.6% in Q2) followed by slower growth of 3.1% in Q4. To smooth the effect of the rebound from temporary factors, economic growth in H2 2011 advanced at an average annual rate of 2.2% compared with 0.8% in H1.

And here’s the chart that demonstrates the point. The gray line is what Nomura calls ‘core’.

Hi, Ho! Hi, Ho! It’s Off To Work We Go…

illustration: Harry Campbell/NYT

On the occasion of the Labor Day break here in the U.S. (and, with apologies, a week late for the Bank Holidays elsewhere), a golden oldie:  Andrew Revkin’s 2005 New York Times article on the difference between GNP, Gross National Product, and “GNH”– Gross National Happiness.

We might recall that the vantage from which he was reporting was the climb to the market peak in late 07– indices at record highs and rising; GNP/GDP growing at at roughly twice the rate they had in the mid-90s– an intoxicating ascent that carried Consumer Confidence up with it.   Since then, of course, what turned out to be a bubble has burst.  So we might wonder what the chart that Revkin included with his piece (below) might look like if it were brought current to today.

It’s become a cliche to observe that “you get what you measure.”  But surely the more appropriate construction is “what you measure is all that you get– if that.”  And we were paying attention to too narrow a set of indicators, Revkin suggested (even in the halcyon days of 2005).

The work on defining “Gross National Happiness” continues:  you can see the proceedings of the Fourth (2008) GNH Conference, or attend the Ninth Conference this October.  And you can contemplate other efforts to “internalize externalities,” like the Genuine Progress Index.

But whatever our feelings about one set of metrics or another, it might be useful to ponder, on our extra day of rest, just what it is that we want to work for when we head back to the trenches on Tuesday…

Bookending an era in U.S. Retail?…

From (Roughly) Daily, a guest post that addresses (in reverse order) two phenomena, one of which contributed mightily to the rise of “Mall Culture” in the U.S.; the other, quite possibly, to its fall…

(copyright, Norm Feuti)

Americans are saving more…  which means that they are spending less.  Earlier this year average household debt was 134% of average household disposable income.  If increased savings lowers that to, say, 100% (by way of comparison, the figure was in the 70% range in the Eighties), and the savings rate (which was essentially zero just before the bubble burst) returns to its historic (70-year) average of 9%, it will pull something like $4 trillion out of annual consumption…  that’s to say it would reduce consumption by over 20%.  And since consumption has been running over 70% of our roughly $13 Trillion GDP, that could make a dent in the trajectory of our consumer-driven society.  A pretty big dent.*

How might it accrue? Well, there’s the impact on corporate earnings and employment (in an industrial/service base already at pretty serious overcapacity…  and then there are the Dead Malls.

* for more on this phenomenon and what it might mean, this post in Jon Taplin’s blog is a good place to start (for a more apocalyptic view, see Dmitri Orlov’s recent talk in Dublin)…  and for a peek at what could become of malls needy of a new purpose, see this post in The Infrastructuralist.

As we cinch up up belts, we might think back to one of the driving forces that created the milieu in which malls were born and flourished: on this date in 1956 President Dwight D. Eisenhower signed the Federal-Aid Highway Act, landmark legislation that funded a 40,000-mile system of interstate roads that ultimately reached every American city with a population of more than 100,000. Today, almost 90% of the interstate system crosses rural areas, putting most citizens and businesses within driving distance of one another. Although Eisenhower’s rationale was martial (creating a road system on which convoys could travel more easily), the rewards were largely civilian. From the growth of trucking to the rise of suburbs, the interstate highway system re-shaped American landscapes and lives… and played a major role in creating the pre-conditions for the growth of the mall.

source: Missouri Department of Transportation