Friday, January 29, 2016

Three positive takeaways from 4th Quarter GDP

 - by New Deal democrat

Aside from the fact that it was positive, there were at least three particularly nice positives in the GDP report for Q4 2015:

1.  Real residential investment itself, and as a share of GDP, increased:

This typically turns down a year or more before the next recession.

2.  Proprietors' income increased.

No graph available yet, but income increased +0.6%.  Typically, but not always, corporate profits follow in the same direction.  Again, these tend to turn at least one year out from a recession.  I also suspect this series is more attuned to domestic consumption that corporate profits is.

3. Median wages increased:

These increased +0.6% and they are up over 2% YoY.  Since this is a median, this is a better measure than average hourly wages.  The worker at the 50th percentile is doing better.