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Muso
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PostPosted: Wed Feb 13, 2013 7:29 pm    Post subject: Growth slows as higher taxes kick in Reply with quote

Retail sales growth slows as higher taxes kick in

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Retail sales barely rose in January as tax increases and higher gasoline prices restrained spending, setting up the economy for only modest growth in the first quarter.

The Commerce Department said on Wednesday retail sales edged up 0.1 percent after a 0.5 percent rise in December.

The small increase suggested the expiration of a 2 percent payroll tax cut on January 1 and higher tax rates for wealthier Americans were hurting the economy.

Still, economists said consumer spending was unlikely to buckle given rising home values, moderate job growth and rallying stock market prices.

"We are starting to see the impact of higher taxes, but we have a positive wealth effect from increasing house prices and a boost from equities," said Robert Dye, chief economist at Comerica in Dallas. "My expectation is that consumers are able to continue to increase spending but only moderately."

So-called core sales, which strip out automobiles, gasoline and building materials and correspond most closely with the consumer spending component of gross domestic product, ticked up 0.1 percent.

While U.S. financial markets were little moved by the report, the Standard & Poor's 500 index earlier hit its highest level since November 1, 2007. Prices for U.S. Treasury debt were trading lower, while the dollar rose against the yen.

Consumer spending, which accounts for about 70 percent of the U.S. economy, grew at a 2.2 percent annual rate in the fourth quarter. That helped to soften the blow to the economy from slower inventory accumulation and sharp cuts in defense spending.

The government said last month that economic output slipped at a 0.1 percent rate in the final three months of 2012.

However, the retail sales report showed core sales were a bit stronger in November and December than previously reported. In addition, businesses outside auto dealerships accumulated slightly more inventories in December than earlier thought.

Taken together with a smaller trade deficit in December, the data suggested the government will raise its estimate for fourth-quarter gross domestic product when it publishes a revision later this month. Even so, the economy likely grew at under a 1 percent rate in the fourth quarter, economists said.

SPENDING GROWTH MOMENTUM TO SLOW

Consumer spending growth is expected to pull back from the fourth-quarter's clip as households adjust to smaller paychecks and gasoline prices march higher. Prices at the pump have increased 30 cents so far this year.

Estimates for consumer spending growth in the first quarter currently range between 0.7 percent and 1.8 percent.

Some economists were encouraged that consumers had maintained purchases, though at a slow pace, despite a reduction in their disposable incomes.

"By no means are we completely out of the woods when it comes to the impact of higher taxes," said Michael Feroli, an economist at JPMorgan in New York. "Evidence from past episodes suggests it could take up to two quarters for spending to fully adjust to new tax realities."

A softer pace of consumer spending is expected to limit GDP growth to a 1.8 percent rate this quarter, according to a Reuters poll of economists. For the year as a whole, economists expect growth of just 2.3 percent.

A separate report from the Labor Department showed higher oil prices helped push up the cost of imported goods by 0.6 percent last month. Import prices had fallen by 0.5 percent in December.

Still, non-petroleum import prices edged up just 0.1 percent in January and have risen just 0.2 percent over the past year, showing a lack of broad inflation pressure.

The Federal Reserve is likely to take solace in the tame non-petroleum import price reading and continue with its bond-buying program for several more months. The Fed is buying $85 billion in bonds per month and has said it will continue with purchases until the labor market outlook improves substantially.

Retail sales were mixed last month, with receipts at auto dealers slipping 0.1 percent after rising 1.2 percent in December. Excluding autos, retail sales increased 0.2 percent last month after advancing 0.3 percent in December.

There was an increase in sales at building materials and garden equipment suppliers, reflecting gains in homebuilding as the housing market recovery shifts into higher gear.

The impact of the tax increases was most evident in restaurants and bar sales, which were flat.

"Dining out tends to be one of the first areas of spending to get cut from household budgets when finances get squeezed, said Ellen Zentner, a senior economist at Nomura Securities in New York.

There were declines in sales at clothing and furniture stores. Sporting goods, hobby, book and music stores, as well as electronics and appliances stores showed gains in sales.


This is another chapter in the big book of D'uh.
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juniper
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PostPosted: Wed Feb 13, 2013 9:35 pm    Post subject: Reply with quote

what about spending cuts?
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PostPosted: Wed Feb 13, 2013 11:19 pm    Post subject: Reply with quote

What spending cuts?
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Bones McCracker
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PostPosted: Thu Feb 14, 2013 12:59 am    Post subject: Reply with quote

Spending cuts reduce the deficit. It might help to see them as "borrowing cuts" and "whoring out cuts". Obama plans to borrow another Trillion fucking dollars this year. Have you ever actually sat down and visualized a trillion of something?
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PostPosted: Thu Feb 14, 2013 1:26 am    Post subject: Reply with quote

5% tax rate, 0 loopholes.
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PostPosted: Thu Feb 14, 2013 10:56 am    Post subject: Reply with quote

BoneKracker wrote:
Spending cuts reduce the deficit. It might help to see them as "borrowing cuts" and "whoring out cuts". Obama plans to borrow another Trillion fucking dollars this year. Have you ever actually sat down and visualized a trillion of something?


it's pretty bad. I agree.

Have fun digging yourself out of this one.
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sikpuppy
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PostPosted: Thu Feb 14, 2013 11:34 am    Post subject: Reply with quote

Wow, our currencies are almost equivalent. Your economy must be really broken. It's almost worth flying there to go shopping. You guys are so poor your momma has lost weight. *insert another vague putdown*.
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PostPosted: Thu Feb 14, 2013 11:56 am    Post subject: Reply with quote

sikpuppy wrote:
Wow, our currencies are almost equivalent. Your economy must be really broken. It's almost worth flying there to go shopping. You guys are so poor your momma has lost weight. *insert another vague putdown*.


"Shadow" currencies are doing well: the swiss franc and canadian dollar. the aussie dollar is doing well on account of industry, but apparently a slowdown is expected.
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PostPosted: Thu Feb 14, 2013 11:56 am    Post subject: Reply with quote

sikpuppy wrote:
Wow, our currencies are almost equivalent. Your economy must be really broken. It's almost worth flying there to go shopping. You guys are so poor your momma has lost weight. *insert another vague putdown*.

You're not wrong. Although that's probably more Adobe being douchenozzles.
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PostPosted: Thu Feb 14, 2013 12:07 pm    Post subject: Reply with quote

aidanjt wrote:

You're not wrong. Although that's probably more Adobe being douchenozzles.

Heh. Douchnozzles.

I wonder what the licencing says about where the software is bought, because it's probably illegal to buy the software in the US and use it in Australia. Mind you, it's been illegal to export cryptography software from the US in the past, so the law is sometimes an arse.
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PostPosted: Thu Feb 14, 2013 8:50 pm    Post subject: Reply with quote

juniper wrote:
sikpuppy wrote:
Wow, our currencies are almost equivalent. Your economy must be really broken. It's almost worth flying there to go shopping. You guys are so poor your momma has lost weight. *insert another vague putdown*.


"Shadow" currencies are doing well: the swiss franc and canadian dollar. the aussie dollar is doing well on account of industry, but apparently a slowdown is expected.

Last time I noticed, the Loonie was worth one U.S. dollar. This would be a good time for Canada to adopt the U.S. dollar and stop pretending it's not part of the United States. :P
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PostPosted: Thu Feb 14, 2013 8:52 pm    Post subject: Reply with quote

sikpuppy wrote:
aidanjt wrote:

You're not wrong. Although that's probably more Adobe being douchenozzles.

Heh. Douchnozzles.

I wonder what the licencing says about where the software is bought, because it's probably illegal to buy the software in the US and use it in Australia. Mind you, it's been illegal to export cryptography software from the US in the past, so the law is sometimes an arse.

It's still illegal to export the more advanced crypto. Like that's going to stop anybody who has illicit use in mind. :roll:

That's kind of like restricting legal ownership of firearms like it's going to reduce the number of Crips and Bloods gunning each other down and hitting random people in drive-bys.
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PostPosted: Sat Feb 16, 2013 11:47 am    Post subject: Reply with quote

BoneKracker wrote:
juniper wrote:
sikpuppy wrote:
Wow, our currencies are almost equivalent. Your economy must be really broken. It's almost worth flying there to go shopping. You guys are so poor your momma has lost weight. *insert another vague putdown*.


"Shadow" currencies are doing well: the swiss franc and canadian dollar. the aussie dollar is doing well on account of industry, but apparently a slowdown is expected.

Last time I noticed, the Loonie was worth one U.S. dollar. This would be a good time for Canada to adopt the U.S. dollar and stop pretending it's not part of the United States. :P


My guess is that the appetite for amalgamating currencies into big right now :P
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