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90 seconds at 9am: US GDP rebounds; Record US budget deficit; RBA rate hike due
February 2nd, 2010
Bernard Hickey details the key news over the long weekend in 90 seconds at 9am in association with the BNZ, including news that US GDP rose a stronger than expected 5.7% on an annualised basis in the December quarter, largely because of a rebuilding of stocks, rather than product actually sold.
The Dow fell on concerns about sustainability of the growth. Meanwhile, Barack Obama announced plans overnight for a record US$1.6 trln budget deficit (10% of GDP) this year, which he forecasts will drop to 4.2% of GDP by 2013, largely funded by taxes on the rich. However, US debt to GDP is expected to rise from 53% to 77% by 2020, taking it close to the area seen as dangerously high.
Meanwhile, the Reserve Bank of Australia is expected to hike the official cash rate there by 0.25% to 4% later this afternoon. This opens up the gap between NZ on 2.5% and Australia on 4% to 1.5%, the biggest deficit seen since the introduction of the OCR in New Zealand in 1999.
Meanwhile New Zealand will report jobs figures on Thursday that expected to show the jobless rate up to 6.8% from 6.5%.
Tags: 90 seconds at 9am, Bernard Hickey
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February 2nd, 2010 at 9:51 am
It’s worth noting John Mauldin’s comments on the US GDP figure. Not optimistic….and the wider article in which these are embedded is a good read, too.
February 2nd, 2010 at 10:02 am
Obama’s budget appears to have a hint of ” magic beans ” about it . If the government can help create jobs – particularly within the badly hit middle-class – then tax revenue to the IRS will rise , and fix the budget hole which was dug in the pursuit of ………….. creating jobs .
However , a cut has been made to a group of wastrals who have been burning a hole in the tax man’s pocket for decades . A $ 100 B funding cut for NASA . A moon-boot up the arse for you !
February 2nd, 2010 at 10:16 am
Hang on RT…the RE liars were counting on that moon pasture as the next boom in land sales. They have all the advertising ready to go….the signs are ready and the trainee sales staff are about to get their moon degrees posted out.
February 2nd, 2010 at 10:22 am
Too late , Wally . Someone has got the best locales shored up . When the astronauts return ( eventually ) , they’ll be greeted by golden arches . Green cheese on your moon-burger , Sir ? MacD’s really are everywhere !
February 2nd, 2010 at 10:27 am
My favourite way of visualizing the US debt: it is equivalent to having borrowed $2.46 every day since the beginning of time.
http://goldnews.bullionvault.com/us_debt_011620102
February 2nd, 2010 at 12:17 pm
GDP figures in America – are these not the same people who said everything was just dandy fine and that the only way was up? Why on earth would any Kiwi believe anything coming out the good ol US of A?
February 2nd, 2010 at 1:21 pm
Re The Yanks
I think it’s fair to say that vested interests have captured the govt (particularly the senate) to the point that the president struggles to get anything done if it’s not what the nation’s boardroom desire…compare the passage of the Patriot Act (lots of expensive new security measures!) vs the Healthcare Bill.
And for that reason, should we be persuing a free trade deal with a democracy as broken as the states?