The U.S. economy improved in the second quarter of 2022. Real GDP fell by 0.9% in Q2 after falling 1.6% in the first. Personal consumption expenditures (PCE), the value of the goods and services purchased by, or on the behalf of, "persons" who reside in the United States, increased $181.1 billion (1.1 percent). The PCE price index, which measures changes in the prices of goods and services purchased by US persons increased 1.0 percent. Excluding food and energy, the PCE price index increased 0.6 percent. Real Personal Consumption increased 0.1 percent. Despite the negativity in the media, this is a positive indicator. Whether it remains a good sign depends on future economic policy. The Fed may get its "soft landing" after all.
Showing posts from July, 2022
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The Federal Reserve’s move to increase interest rates by 75 basis points will not only impose significant costs on the economy, it will do so needlessly. It won't reduce inflation, but it will add to political and social instability. The key skill of a central bank in the current environment is identifying inflation generating sectors and providing targeted, anti-inflationary support to the rest. There are a number of ways to do so, but, given the capture of the Fed by financial institutions, we do not expect them to be familiar with these techniques. (We suggest they review our Maternal Mortality Reparation Facility for Black Women at https://www.prlog.org/12876083-maternal-mortality-reparation-facility-for-black-women.html and our proposal to create a $50 billion-dollar Black Bank financing facility, outlined in Black Enterprise Magazine on October 21, 2019, online at https://www.blackenterprise.com/black-banking-crisis-economist-offers-50-billion-solution/ ). We continue to bel
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Recent Supreme Court decisions damage the international reputation of the US. On June 24, the Court, in Dobbs v. Jackson Women’s Health Organization , upheld a Mississippi law that banned abortions after 15 weeks of pregnancy, with no exception for rape or incest. The decision strikes down the landmark Roe v. Wade decision. In West Virginia v. US Environmental Protection Agency (EPA ) prevents the agency from regulating greenhouse gas emissions, a core mission and task of the EPA. The regulation questioned concerns carbon dioxide generated by power plants — in the middle of increased global efforts to reduce these emissions. This case was based on the Clean Power Plan, a plan to cut emissions from coal-fired power plants that was never implemented. Biden tried to have the case dismissed since the policy at issue was not operational nor was it being resurrected. The Court ruled anyway. The EPA decision will have the added impact of limiting the ability of the US government to address