October, 29 2015, 11:15am EDT
Growth Falls Off Sharply in Third Quarter
WASHINGTON
The Commerce Department reported the economy grew at a 1.5 percent annual rate in the third quarter, a sharp slowing from the 3.9 percent rate reported for the second quarter. The falloff was mostly due to slower inventory growth. Inventories subtracted 1.44 percentage points from the growth rate in the quarter after adding 0.02 percentage points in the second quarter. Final demand for the quarter grew a 3.0 percent annual rate. For the first three quarters of the year, GDP has risen at a 2.0 percent annual rate.
It is worth noting that inventories were still accumulating at a relatively healthy $56.8 billion annual rate in the third quarter. The negative GDP effect was due to the extraordinarily rapid $113.5 billion pace reported for the second quarter. While growth may pick up some in future quarters, inventories are not likely to be a major positive in GDP.
Consumption grew at a 3.2 percent rate in the quarter, driven by a 6.7 percent growth rate in durable goods consumption. Car buying continued to be strong in the quarter, but spending on recreational goods and vehicles were the biggest driver of the growth in durables, rising at an 10.4 percent annual rate. Health care spending continues to grow relatively modestly. Nominal spending grew at a 5.1 percent rate, while health care prices rose at just a 1.1 percent rate.
Non-residential investment grew at a weak 2.1 percent rate. Equipment investment grew at a 5.3 percent annual rate, while structure investment declined at a 4.0 percent rate. This decline follows a reported rise of 6.2 percent in the second quarter. This is more likely a story of erratic data than an actual decline, but clearly structure investment is not growing rapidly. Equipment investment has been growing modestly for some time, rising 6.9 percent over the last year.
Housing grew at a modest 6.1 percent rate, down from an average of 9.8 percent in the prior three quarters. It is likely that housing will continue to boost GDP into 2016, but the growth rate is likely to be more modest in future quarters.
Exports and imports grew at almost the same rate, having little net effect on growth. This is likely somewhat of an aberration as the recent rise in the dollar -- coupled with weakness in other major economies -- is likely to lead to some rise in the deficit in future quarters.
Government expenditures grew at a 1.7 percent annual rate, adding 0.3 percentage points to growth. Almost all of this rise was attributable to state and local expenditures, which grew at a 2.6 percent annual rate. Federal spending grew at a just a 0.2 percent annual rate.
There continues to be no evidence of inflationary pressures in any sector. The overall GDP price index rose at a 1.2 percent rate. It is up by 0.9 percent from its year-ago level. The core PCE grew at just a 1.3 percent rate in the quarter and is up 1.3 percent over the last year.
The underlying picture in this report is one of continuing modest growth. While there seems little basis for serious concerns about a recession, it is also difficult to find any basis for concerns about the economy overheating and an increase in inflationary pressures. With a relatively low saving rate of 4.7 percent, and durable good purchases already at high levels, consumption growth is more likely to slow than to accelerate. We have also seen healthy growth in residential construction in the last year and a half, which is likely to mean that future growth will be slower.
There is little reason to expect any major upturns in the rate of growth of investment in the immediate future. Net exports are likely to be at least a modest negative, unless the new Canadian government gets very aggressive with its stimulus plans. Government spending at all levels is likely to remain contained as there continues to be a political commitment to austerity.
For these reasons, there is little cause to believe that the economy will accelerate much above its recent 2.0 percent growth rate, which in turn indicates there is little cause for the Fed to attempt to slow growth.
The Center for Economic and Policy Research (CEPR) was established in 1999 to promote democratic debate on the most important economic and social issues that affect people's lives. In order for citizens to effectively exercise their voices in a democracy, they should be informed about the problems and choices that they face. CEPR is committed to presenting issues in an accurate and understandable manner, so that the public is better prepared to choose among the various policy options.
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Texas State Troopers in Riot Gear Crack Down on UT Students' Gaza Protest
"Why do we even have these institutions of higher learning if we won't let students speak their conscience and protest?" said one University of Texas professor.
Apr 24, 2024
This is a developing story... Please check back for possible updates...
Civil rights advocates on Wednesday expressed alarm at a rapid escalation by Texas state troopers who descended on a student-led protest at University of Texas at Austin, which was organized in solidarity with Gaza and other U.S. college students taking part in a growing anti-war movement.
UT students gathered on campus at midday and were promptly given two minutes to disperse by state troopers, who had already been called to the scene.
The troopers were equipped with riot gear, with some carrying assault rifles and several stationed on horses.
Erick Lara, a 20-year-old sophomore, told The Dallas Morning News that the nonviolent protest transformed "within minutes" after the police began arresting demonstrators.
"I didn't think it would escalate this far," he told the outlet. "And I didn't think there would be this much police intervention from what's supposed to be a peaceful protest. Not very peaceful when there's a bunch of aggressors around, especially on horses."
The organizers called the gathering "The Popular University" and said it was aimed at pressuring UT to "divest from death."
The protesters walked out of their classes to demand UT divest from weapons manufacturers in order to end its complicity in Israel's U.S.-backed assault on Gaza, which has killed at least 34,262 Palestinians.
Student-run newspaper The Daily Texanreported roughly 50 state troopers were deployed to stop the initial protest of about 150-200 people.
Ryan Chandler, a reporter for NBC affiliate KXAN-TV and UT alum, reported that there were at least 10 students detained.
"Went here for four years, never saw anything like this," said Chandler, posting a video of a group of police pushing one student to the ground and arresting them.
Joseph Pierce, a Stony Brook University professor who attended graduate school at UT, also said the escalation was an unusually "drastic response to students advocating for an end to the genocide of the Palestinian people."
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The students faced the state troopers in a standoff on the university's main street.
"This violence against peaceful student protesters at UT Austin is absolutely horrifying—and should be condemned in the strongest terms by every politician and mainstream journalist," said former New Yorker editor Erin Overbey.
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The university had informed organizers with the on-campus Palestine Solidarity Committee on Tuesday that exercising their First Amendment rights in support of Palestinians in Gaza would "violate our policies and rules."
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Building trades unions and their rank-and-file members are generally seen as more conservative and pro-Trump than other elements of the U.S. labor movement. In 2017, McGarvey celebrated Trump's effort to advance construction work on the Keystone XL pipeline, a massive fossil fuel project that Biden effectively killed in 2021 after years of organizing by environmentalists and Indigenous tribes.
But NABTU's leadership endorsed Clinton over Trump in the 2016 presidential election and Biden over Trump in 2020.
In a five-minute ad released Wednesday, the union highlights Trump's pledge to be a dictator on "day one" and condemns the former president as a dangerous egomaniac.
NABTU called for Trump's resignation after the January 6, 2021 insurrection at the U.S. Capitol.
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Wow. You may have seen a short version of the North America Building Trade Union ( @NABTU) video endorsement of Biden. The full video is incredible and absolutely devastating for Trump. They did not hold back. A must watch till the end. pic.twitter.com/stL7b7JazP
— MeidasTouch (@MeidasTouch) April 24, 2024
In his statement Wednesday announcing NABTU's endorsement, McGarvey cites the Bipartisan Infrastructure Law, the Chips and Science Act, and the Inflation Reduction Act as key legislative achievements that "brought life-changing, opportunity-creating, generational change focused on the working men and women of this great country who have for far too long been clamoring for a leader to finally keep their word."
"In the coming months," he added, "we will continue to engage our membership and their families directly, member to member, door to door, and jobsite to jobsite, with an unprecedented field program in key battleground states, to tell them how important President Biden and his policies have been to them, their economic security, and their freedoms."
But McGarvey said in an appearance on MSNBC's "Morning Joe" on Wednesday that the union does not intend to "waste a lot of time talking to every American that supports Donald Trump" or "some of our members that support Donald Trump, because we're not gonna change their minds."
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House Bill 1202 passed in a 68-28 vote, and Republican Gov. Bill Lee, who has never vetoed legislation, is expected to sign it, clearing the way for the state to require school districts to allow teachers to carry firearms without notifying students' parents.
According toThe Tennessean, the legislation does not allow schools or school districts to opt out of the program and requires administrators "to consider every individual who wants to carry."
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"Our children's lives are at stake," said House Democratic Caucus Chair John Ray Clemmons (D-55).
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Jones applauded Tennessee residents for speaking out against H.B. 1202 in the House chamber.
"Despite my Republican colleagues' best effort, the power of the people cannot and will not be stopped," said the lawmaker.
The GOP ended the debate over the legislation after one teacher, Lauren Shipman-Dorrance, cried out from the viewing section. Shipman-Dorrance was removed by state troopers on orders from House Speaker Cameron Sexton (R-25).
After the bill passed overwhelmingly—despite four Republicans who joined the Democrats and three who abstained—the remaining protesters chanted, "Blood on your hands!" before the GOP ordered state troopers to remove them.
Sarah Shoop Neumann, whose children attend Covenant Day School, delivered a letter with more than 5,300 signatures to the House on Monday demanding that lawmakers defeat the bill and warning that the legislation "ignores research that shows the presence of a gun increases the risks posed to children."
Shoop Neumann toldThe Tennessean that the bill's passage was "disgraceful."
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