On January 1, 2015, the Carryout Bag Ordinance will start in Dallas.
Are you ready?
An Inconvenient tax: picking people’s pockets
By Raymond Thomas Pronk
Warning, when you check out, be on the lookout for pickpockets.
The latest green movement cause du jour is the banning or taxing of disposable plastic and paper bags. These laws or city ordinances are designed to nudge or coerce customers to bring their own reusable tote bag when they shop for groceries and other merchandise.
A number of United States cities including Washington, D.C., Los Angeles, San Francisco, Portland, Seattle, Boulder, Austin and now unfortunately Dallas have either banned or taxed disposable plastic and/or paper bags or so-called “single-use carryout bags.” According to the Earth Policy Institute, over 20 million people are currently covered by 132 city and county plastic bag bans or fee ordinances in the U.S.
For decades most American and European businesses have provided their customers bags, at no additional charge, to carryout and transport their purchase. In the 1980s businesses began to give their customers a choice of paper or plastic.
On March 26, 2014, the Dallas City Council passed an 8 to 6 City Ordinance No. 29307. It requires business establishments that provide their customers “single-use carryout bags” to register with the city annually each location providing these bags and charge their customers an “environment fee” of 5 cents per bag to promote a “culture of clean” and “to protect the natural environment, the economy and the health of its residences.”
Give me a break. It is a new tax to raise millions in new tax revenue for the City of Dallas. Who are the elected Dallas-8 council member watermelons (green on the outside, red on the inside) that ordained this tax on the people and businesses of Dallas? The names of the Dallas-8 are Tennell Atkins, Carolyn R. Davis, Scott Griggs, Adam Medrano, Dwaine R. Caraway, Sandy Greyson, Philip T. Kingston, and Mayor Mike Rawlings.
The Dallas-8 are led by council member Caraway, who wanted to completely ban plastic and paper single-use carryout bags. Instead they decided to shake down Dallas businesses and their customers with a new highly regressive tax. Caraway refuses to call it a tax and claims the new ordinance which went in effect on January 1 is “a ban with a fee, such as other cities are doing across the United States.”
The eight-page ordinance includes the definition and standards that reusable carryout bags must satisfy: “A reusable carryout bag must meet the minimum reuse testing standard of 100 reuses carrying 16 pound.” Reusable bags may be made of cloth, washable fabric, durable materials, recyclable plastic with a minimum thickness of 4.0 mil or recyclable paper that contains a minimum of 40 percent recycled content.
All of the above reusable bags must have handles with the exception of small bags with a height of less than 14 inches and a width of less than 8 inches.
Business establishments can either provide or sell reusable carryout bags to its customer or to any person.
The city ordinance exempts some bags from the single-use carryout definition including:
The Dallas 5 cent paper and plastic bag tax or environment fee applies only to single-use carryout bags defined as bags not meeting the requirements of a reusable bag.
Businesses that violate the ordinance can be fined up to a maximum of $500 per day.
Lee Califf, executive director of the American Progressive Bag Alliance, a bag manufacturing group, said “This legislation applies to a product that is less than 0.5 percent of municipal waste in the United States and typically less than 1 percent of litter in studies conducted across the country;” “Placing a fee on a product with such a minuscule contribution to the waste and litter streams will not help the environment: but it will cost Dallas consumers millions more per year on their grocery bills, while hurting small business and threatening the livelihoods of the 4,500 Texans who work in the plastic bag and recycling industry.”
Stop the shakedown of Dallas businesses and their customers. Repeal the inconvenient tax on paper and plastic disposable bags by voting out of office the Dallas-8 city council members who voted for this tax, Dwaine Caraway. Support your Texas state representatives in passing a new law that would prohibit cities such as Dallas and Austin from banning or taxing paper and plastic carryout bags.
On January 1, 2015, the Carryout Bag Ordinance will start in Dallas.
Are you ready?
Retailers offering only reusable bags, as defined by the ordinance, have different requirements.
All retailers should look at their operations and determine if their bags are single-use, reusable, or exempted from the single-use definition. Consult the full ordinance for all details pertaining to the ordinance and what is expected for each type of bag including thickness, language on the bag, durability, signage, and other considerations.
Customers, you are encouraged to bring your bagand keep your change.Single-use carryout bags have a five-cent per bag environmental fee. A single-use bag can be paper or plastic.Reusable bags do not have the environmental fee, though stores may charge you to offset costs. Reusable bags stores offer can be made from cloth or other washable woven materials, recyclable paper, or recyclable plastic so long as they meet certain requirements. However, any bag you bring with you to use is considered reusable since you are reusing it.There are some bags that are exempted from the single-use bag definition:
Remember to recycle the bags you can recycle appropriately.
Many wonder why the City passed this ordinance. The Dallas City Council passed the ordinance to help improve the environment and keep our city clean. The City is currently spending nearly $4 million dollars to remove litter from our community to keep it beautiful and thriving.
The Carryout Bag ordinance is intended to encourage shoppers to use reusable bags to carry goods from stores, restaurants, and other locations to reduce the number of bags that can end up loose in the environment as litter.
To help you understand, we have created this list of frequently asked question.
The carryout bag ordinance outlines the City’s “desire to protect the natural environment, the economy and the health of its residents,” and the “negative impact on the environment caused by improper disposal of single-use carryout bags.” The Dallas City Council approved the ordinance on March 26, 2014.
The ordinance takes effect on January 1, 2015.
Retailers and customers should be ready and know all the details. This website and the City’s Code Compliance Services website have details to help retailers prepare. The links to the Code website on DallasCityHall.com are below.
Some are still unclear how the ordinance may impact them.
Businesses will have to register each location with the City in order to offer single-use bags. No registration is necessary if a business is only offering reusable bags or bags that are exempted from the single-use bag definition in the ordinance. Businesses must be registered before distributing single-use carryout bags starting January 1, 2015. Businesses are required to collect a five-cent environmental fee for every single-use bag used by a customer.
Customers will be charged a five-cent environmental fee for each single-use bag, paper or plastic, they receive from retailers. Again, reusable bags and bags exempted from the definition of single-use bags do not carry the environmental fee. You can avoid the environmental fee by bringing your own bags with you. The five cent fee assessed for the single-use bag is not subject to sales tax.
Will I still be able to get plastic carryout bags?
Yes, provided your retailer chooses to offer them and collect the environmental fee.
Can I bring my own reusable bags to carry out items I purchased?
Yes. Customers are encouraged to bring their own reusable bags to carry out their items instead of paying the five-cent environmental fee per single-use plastic or paper bag.
If I reuse a single-use carryout bag, will I have to pay the fee again?
Whatever bag you bring — tote bag, golf bag, diaper bag, satchel, purse, or produce bag — if you bring it with you to reuse, you do not have to pay the environmental fee.
Where does the money go?
A portion of the fees will be used to pay for enforcement of the ordinance and for public education efforts. Stores keep 10 percent of the five-cent fee to help offset administrative costs.
Does this ordinance apply to all businesses?
All retailers that offer single-use carryout bags in Dallas are subject to this ordinance.
What about non-profits or charities?
If the non-profit or charity offers food, groceries, clothing, or other household items free of charge to clients, they may still use single-use carryout bags for the specific function of distributing those items. However, the ordinance will apply to any bags used at the point of sale for any goods sold through the non-profit or charity.
Additionally, any non-profit or charity that collects goods for donation from the public or which leaves informational material for the public must be sure any door-hanger bags left for collecting those goods or providing that informational material are biodegradable.
Does the ordinance include all bags?
The ordinance applies to single-use paper or plastic carryout bags used by businesses as defined in the ordinance language.
What if businesses don’t follow the ordinance?
Businesses that violate the ordinance could face fines of up to $500 per day.
How will the ordinance be enforced?
City Code Compliance inspectors will respond to complaints and provide proactive enforcement.
How can the City know if businesses aren’t complying with the law? Will they be doing more inspections?
There will be proactive enforcement and periodic audits. Additionally, the City will respond to complaints from residents.
Will the ban on single-use bags at city facilities apply to retailers at American Airlines Center, city museums, the Omni Dallas Hotel, and Fair Park?
Yes. The City Attorney’s Office will work with Code Enforcement to determine which facilities are affected and how.
Whom should I contact if I have additional questions?
Call 3-1-1, the Office of Environmental Quality, Code Compliance or email us firstname.lastname@example.org.
NEW⇒ Where can I find the forms?
Forms and more information are available on the Code Compliance website dedicated to the Carryout Bag Ordinance here.
For months Dwaine Caraway has insisted he had the votes to pass at least a partial ban on the single-use carryout bag. He was right: By a vote of 8-6 the Dallas City Council passed the so-called “environmental fee ordinance,” which bans single-use carryout bags at all city facilities and events while still allowing retailers to use plastic and paper bags.
But beginning January 1 retailers will have to charge customers who want them “an environmental fee” of five cents per bag, and they will get to keep 10 percent of that money. The ordinance also says retailers who want to keep handing out plastic and paper bags will have to register with the city and keep track of bags sold.
The city says the money raised from the bag fees will help go toward funding enforcement and education efforts that assistant city manager Jill Jordan told the council could cost around $250,000 and necessitate the hiring of up to 12 additional staff members.
Wednesday’s vote came a year after council member Dwaine Caraway asked the city attorney to draft an ordinance that completely banned the bag. The council member says the ordinance passed today was a compromise born out of “a fair process” that included environmentalists, bag manufactures and retailers. Several of his colleagues wanted to send the proposed ordinances back to committee for further debate. But Caraway wanted a vote now.
“You get to a point where it’s time to make decisions, decisions that will have a great impact on the city of Dallas and our environmental status … and the beautification of our city,” he said. The process has “been pretty tough. it’s been back and forth. We listened and listened fairly.”
But six of his colleagues disagreed: Sheffie Kadane said the fee-based ban will result in a lawsuit from retailers and manufacturers. Rick Callahan called it a “government intrusion.” Jennifer Staubach Gates said it wouldn’t do any good, because in five years the reusable bags supported by the environmentalists will end up in landfills too. And Jerry Allen said the three options being considered by council, including a full-out ban, represented “a lack of clear conviction,” which he found disappointing.
And then there was Lee Kleinman, who on Friday indicated he supported the fee-based ordinance. Five days later he’d changed his mind and said he no longer cared what happened in his colleagues’ districts.
“I would personally probably stay more focused on my own district, which does not have the same trash problems as others,” he said, to the amazement of some of his southern sector colleagues. “Why should I care if someone is shopping like at Southwest Center Mall and they want a plastic bag? If people in that community are satisfied with the conditions around that mall, why should I utilize my position in North Dallas to improve those conditions? I should just focus my energies on North Dallas redevelopment projects and not help another improve quality of life in other areas of the city.”
That entire speech is above, thanks to my colleague Scott Goldstein.
Vonciel Jones Hill, who has said in the past she opposes any ban or bag tax, was no present for today’s vote. Monica Alonzo also voted against it, but said nothing.
In a statement released following the vote, the American Progressive Bag Alliance said it’s “a move that will fail to accomplish any environmental goals while jeopardizing 4,500 Texas jobs and hurting consumers.”
Its executive director, Lee Califf, said in a statement that “the vote to approve a 5-cent plastic and paper grocery bag fee in Dallas is another example of environmental myths and junk science driving poor policy in the plastic bag debate.”
But it’s not clear if the state will allow Dallas’ new bag “ban” — or bag tax, more appropriately.
Attorney General Greg Abbott is going to weigh in on the legality of bag bans, following a request by state Rep. Dan Flynn of Canton on behalf of the Texas Retailers Association. Jerry Allen asked Dallas City Attorney Warren Ernst if the state allows bag bans.
“We are ready to defend that position,” Ernst said. “If it’s the will of the council to pass the ordinance, we’ll defend that as a legal action by the city.”
Allen was not convinced, insisting “there’s a tremendous amount of uncertainty.” Ernst appeared to agree.
Those council members opposed to the ordinance said Dallas needs to do a better job of enforcing its litter laws. Jordan told the council that the city spends $4 million annually on trash pick-up, “and we still have litter.”
In the end, said council member Scott Griggs, “this is just one step. We tackle the bags then we can move on to Styrofoam and other issues that cause trash. This is a large elephant we’ll have to take on as a city and a council.”
Kroger’s Gary Huddleston, also of the Texas Retailers Association, shared a hug with Dwaine Caraway following today’s council vote.
Following the vote, Gary Huddleston, head of the Texas Retailers Association, said he wasn’t sure whether his organization would sue the city. He noted that they are awaiting the attorney general’s ruling on the legality of a fee.
“It will affect the retailers in the city of Dallas and it will affect our customers,” Huddleston said. “They’ll have to pay for their paper and plastic bags or they bring in their reusable bags.”
“We personally believe the solution to litter in the city of Dallas is a strong recycling program and also punishing the people that litter and not punishing the retailer,” Huddleston said.
The fee means that businesses will have to institute additional programming and training in order to enforce ordinance and track the fees. Customers will “have to pay a nickel a bag, whereas maybe they use that nickel to buy more product in my store.”
But Huddleston’s concerns didn’t stop him from hugging Caraway outside chambers. The two men smiled and embraced in front of television cameras.
The council member said he was pleased with the result of more than a year of work. He refused to call the fee a “tax.”
“It’s a ban with a fee, such as other cities are doing across the United States,” Caraway said.
He said it’s important for residents to know the ban does not cover a variety of bags, such as those in the produce section of grocery stores or at restaurants
“Folks need to understand that these are single-use carryout bags,” Caraway said. “These are simply those thin, flimsy bags that take flight and that are undesirable and bad for the environment.”
Staff writer Scott Goldstein contributed to this report.
The City of Dallas has implemented new rules for plastic grocery bags, imposing a 5 cent fee on single-use plastic or paper grocery bags. The rules go into effect in January. (Published Wednesday, Mar 26, 2014)
Thursday, Mar 27, 2014 • Updated at 5:56 AM CST
The Dallas City Council has passed a proposal ordering retailers to charge a fee for one-time use plastic bags while partially banning them from city-owned facilities.
In a 8-6 vote, the council passed the ordinance requiring retailers to charge customers a $0.05 fee if they request single-use plastic or paper bags.
Dallas Plastic Bag Ban Vote Wednesday[DFW] Dallas Plastic Bag Ban Vote Wednesday
The Dallas City Council is expected to vote on plastic bag ban issue on Wednesday. (Published Monday, Mar 24, 2014)
Dallas City Councilman Dwaine Caraway accepted the compromise of a bag fee after spending a year fighting for a ban on single-use bags.
“This is an opportunity for us to clean our city, to clean our environment and to move forward, and to be like the other cities across the country and around the world,” Caraway said.
Zac Trahan with Texas Campaign for The Environment said Austin and eight smaller Texas cities have taken stronger action by banning single-use bags, but he still supported the Dallas regulations.
“It’s still a step in the right direction because it will still result in a huge reduction in the number of bags that will be distributed,” he said.
The ordinance also requires those retailers to register with the city and track the number of single-use bags sold.
The retailer would keep 10 percent of the environmental fee with the remainder going to the city to fund enforcement and education efforts.
Lee Califf, the executive director of the bag manufacturers’ group American Progressive Bag Alliance, released the following statement after the ordinance was passed.
“The vote to approve a 5-cent plastic and paper grocery bag fee in Dallas is another example of environmental myths and junk science driving poor policy in the plastic bag debate. This legislation applies to a product that is less than 0.5% of municipal waste in the United States and typically less than 1% of litter in studies conducted across the country. The City Council rushed through a flawed bill to appease its misguided sponsor, despite the fact that 70% of Dallas residents opposed this legislation in a recent poll.
“Placing a fee on a product with such a minuscule contribution to the waste and litter streams will not help the environment; but it will cost Dallas consumers millions more per year on their grocery bills, while hurting small businesses and threatening the livelihoods of the 4,500 Texans who work in the plastic bag manufacturing and recycling industry. Councilman Caraway may view this vote as a victory for his political career, but there are no winners with today’s outcome.”
Several Council Members opposed any new restrictions.
Rick Callahan said grocery bags are only a small part of the Dallas litter problem and better recycling education is needed.
“Banning something or adding a fee, putting more regulation on business is not the answer,” Callahan said.
The ordinance does ban single-use plastic or paper bags at city-owned facilities and events.
It still allows distributing multi-use, or stronger, paper or plastic bags for free so stores can get around charging the fee by offering better bags.
The ordinance goes into effect Jan. 1, 2015.
After more than a year of considering a ban on disposable shopping bags, the Dallas City Council voted instead last week to impose a 5-cent “environmental fee” on each bag.
In previous columns, Steve Blow had opposed a ban, while Jacquielynn Floyd had supported it. Today, they debate the council’s new approach.
Steve: Leave it to the Dallas City Council to take a bad idea and find a way to make it worse. I thought a ban on shopping bags was a bad idea, but slapping a new tax on Dallas shoppers is even more pointless.
This isn’t just a new tax, it’s a new mini-bureaucracy at City Hall. There’s talk of hiring 12 new people to run the program. And I’m sure someone is already writing a job description for a Deputy Junior Assistant City Manager for Retail Packaging Assessment and Oversight.
Good grief. I had little faith that a ban would accomplish much. I’m even more dubious about a bag tax — except as a tool of government growth.
Jacquielynn: Dude, it’s a nickel. Nobody’s getting taxed into bankruptcy here.
I hope, in fact, that this modest 5 cents is enough to assign at least minimal value to these awful bags. The reason they end up on fences, in fields and as tree garbage is that they’re so free and plentiful.
Almost everybody collects them every day — yet they have virtually no value. It’s human nature to take something for free, then toss it or lose track if you don’t need it.
Like it or not, this is the direction cities are headed. Los Angeles has had a ban in effect for more than a year. New York and Chicago are talking about either banning or limiting plastic bags.
I don’t think this is a case of forcing people to bow to the authoritarian rule of government overlords — we’re asking for a very minor change in their habits. It makes environmental sense, like other conservation and recycling measures that have become routine.
Steve: They don’t end up as litter because they’re free and plentiful. They end up as litter because a few dopes among us litter. A nickel is not going to transform those dopes into responsible citizens. Anyone careless with trash is not going to suddenly become careful with 5-cent trash.
On a fundamental level, this issue chaps my inner libertarian. I don’t think “government regulation” is automatically a dirty word. But I firmly believe the need must be obvious and compelling before we add more regulation.
Jack, you may be fixated on plastic bags as you drive around, but I promise they make up a small percentage of the litter that’s out there. I see more cups than anything. Will we be required to carry around reusable cups next? Or pay a cups tax?
Jacquielynn: Steve, I agree that clueless dolts dump all kinds of garbage, from burger wrappers to moldy old sofas.
Plastic bags are a particular problem, though, for the very qualities that make them such a successful consumer product: They’re cheap, durable, lightweight and water-resistant. They’re mobile, easily blown into trees, creeks, fences and even for miles out into rural areas. A farmer who lives outside Dallas told me this week he hates plastic bags because when they land on his property, baby calves can choke on them.
Most of us don’t have calf problems, but the bags’ weightlessness makes them vulnerable to any breeze. Even if they’re responsibly discarded, they’ll blow out of open trash cans, trucks, you name it.
They’re not just a blight — they’re a highly contagious blight.
Steve: Oh, c’mon. How am I supposed to rebut choking baby calves?
I will point out that Washington, D.C., has a real paradox on its hands. It implemented a 5-cent fee on disposable bags in 2010. And in a survey last year, residents reported using 60 percent fewer bags.
But get this: Tax revenue from the bags has been going up, not down as was expected. The city had originally projected to collect $1.05 million in fiscal 2013. Instead, bag fees topped $2 million.
The dollars don’t lie. More bags are being used after four years. Sure, some people will switch to reusable bags. But this sure isn’t going to make plastic bags disappear. Is a regressive new tax really worth it?
Jacquielynn: I’d be happy to sidestep the entire “tax” issue by banning bags outright. If you want groceries, make sure you have a way to get them home.
But if cities aren’t ready to take that step, and they actually see a windfall out of bag taxes, maybe that should be dedicated to cleanup efforts.
Ideally, though, stores wouldn’t have the things at all. They can make boxes available (a la Costco). They can sell heavier plastic multiple-use bags for 25 or 50 cents. Shoppers buying just one or two items could learn to use the flexible appendages at the ends of their arms to carry stuff away.
The mail I’ve received from angry readers makes it plain that a lot of people loathe this plan, whether you call it a ban or a tax.
But I just don’t think we’re asking for a dramatic change in the way we live our lives. If we don’t stop assuming that everything we send to the landfill magically disappears, the landfill is going to start coming to us. Do you really want to live in a city that has garbage in the trees?
Steve: No, it’s not a drastic change. Just a needless one. And I’m looking out my office window at six or seven trees with nary a bag in sight. Except for a few spots, the litter problem has been overblown.
I just wish we had tried a major public-awareness campaign before imposing more taxes and more regulation. 1. Recycle bags where you get them. 2. Try reusable bags. 3. Don’t litter, you dope.
Jacquielynn: On those points, we’re in wholehearted agreement.
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Published on May 2, 2014
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U.S. economic growth accelerated more than expected in the second quarter and the decline in output in the prior period was less steep than previously reported, bolstering views for a stronger performance in the last six months of the year.
Gross domestic product expanded at a 4.0 percent annual rate as activity picked up broadly after shrinking at a revised 2.1 percent pace in the first quarter, the Commerce Department said on Wednesday.
That pushed GDP above the economy’s potential growth trend, which analysts put somewhere between a 2 percent and 2.5 percent pace. Economists had forecast the economy growing at a 3.0 percent rate in the second quarter after a previously reported 2.9 percent contraction.
A separate report showing private employers added 218,000 jobs to their payrolls last month, a decline from June’s hefty gain of 281,000, did little to change perceptions the economy was strengthening.
U.S. stock futures added to gains and yields on U.S. Treasuries rose after the data. The U.S. dollar hit a seven-week high against the yen and an eight-month high against the euro.
The economy grew 0.9 percent in the first half of this year and growth for 2014 as a whole could average above 2 percent. The first quarter contraction, which was mostly weather-related, was the largest in five years.
Employment growth, which has exceeded 200,000 jobs in each of the last five months, and strong readings on the factory and services sectors from the Institute for Supply Management underpin the bullish expectations for the rest of the year.
The government also published revisions to prior GDP data going back to 1999, which showed the economy performing much stronger in the second half of 2013 and for that year as a whole than previously reported.
EYES ON THE FED
The GDP data, which was released only hours before Federal Reserve officials conclude a two-day policy meeting, could fuel debate on whether the central bank may need to raise interest rates a bit sooner than had been anticipated.
Growth in the second quarter was driven mainly by consumer spending and a swing in business inventories.
Consumer spending growth, which accounts for more than two-thirds of U.S. economic activity, accelerated at a 2.5 percent pace, as Americans bought long-lasting manufactured goods and spent a bit more on services.
Consumer spending had braked to a 1.2 percent pace in the first quarter because of weak healthcare spending.
Despite the pick-up in consumer spending, Americans saved more in the second quarter. The saving rate increased to 5.3 percent from 4.9 percent in the first quarter as incomes rose, which bodes well for future spending.
Inventories contributed 1.66 percentage points to GDP growth after chopping off 1.16 points in the first quarter.
The economy also received a boost from business investment, government spending and investment in home building.
Trade, however, was a drag for a second consecutive quarter as some of the increase in domestic demand was met by a surge in imports. Domestic demand rose at a 2.8 percent pace, the fastest since the third quarter of 2011. It increased at a 0.7 percent pace in the first quarter.
Solid demand, which underscores the economy’s firming fundamentals, led to some pick-up in price pressures in the second quarter, a welcome development for Fed officials who have long worried about inflation being too low.
A price index in the report rose at a 2.3 percent rate in the second quarter, the quickest in three years, after advancing at a 1.4 percent pace in the prior period.
A core price measure that strips out food and energy costs increased at a 2.0 percent pace, the fastest since the first quarter of 2012. It had increased at a 1.2 percent rate in the first quarter.
he U.S. economy surged in the second quarter, more than offsetting a first-quarter contraction and putting growth back on an upward trajectory in 2014.
The U.S. economy rebounded strongly this spring after a first-quarter contraction, eking out positive growth over the past six months and raising hopes for sustained growth in the second half of 2014. Josh Zumbrun joins MoneyBeat with Paul Vigna.
Gross domestic product, the broadest measure of goods and services produced across the economy, advanced at a seasonally adjusted annual rate of 4.0% in the second quarter, the Commerce Department said Wednesday. Economists surveyed by The Wall Street Journal had forecast growth at a 3.0% pace for the quarter.
An upturn in inventory building by businesses and an acceleration in consumer spending led the broad gains and offset a larger drag from increased imports.
The solid improvement comes on the heels of a first quarter when the economy shrank at a 2.1% pace. While still the worst quarter of the recovery that began in mid-2009, the first-quarter figure reflects an upward revision from a previously estimated 2.9% contraction.
Over the past year, the economy grew 2.4%—slightly ahead of the 2.3% average annual gain from recovery’s start until the end of 2013, before an unusually cold winter socked the economy.
The first quarter “was an anomaly and growth will be much stronger through the rest of this year,” said PNC Financial Services Group economist Stuart Hoffman. “Consumers are spending thanks to job and income gains, and with borrowing costs still low businesses are investing to meet stronger demand.”
Household spending—roughly two-thirds of the economy—advanced at a 2.5% rate last quarter. That’s an increase from the first quarter’s modest 1.2% gain. Spending on total goods accounted for its highest contribution to GDP since late 2010, and spending on long-lasting durable goods was near a five-year high, led by a big jump in auto sales.
Annual revisions, also released Wednesday, showed the economy expanded at a 4% pace in the second half of 2013, the best six-month stretch in 10 years. But figures over the past five years, including new revisions back to 2011, continue to tell a familiar tale. Unable to string together several quarters of steady growth, the recovery that began in 2009 is still the weakest since World War II.
There is reason to be guarded about last quarter’s rebound. The initial reading on GDP relies on estimates of trade flows, health-care spending and other aspects of the economy and could be significantly revised in subsequent takes.
The U.S. second-quarter GDP increased at a 4% rate, well above expectations, raising hopes for sustained growth in the second half of 2014. WSJ’s Polya Lesova joins Simon Constable on the News Hub with the details. Photo: Getty
The strong advance in consumption is at least partially payback for a cold winter to start the year. If weather gets the blame for a bad first quarter, it deserves some credit for the second.
The second quarter was also strongly aided by businesses restocking. The change in private inventories added 1.66 percentage points to growth during the quarter. The gain mirrors the strong buildup in inventories that helped propel growth in the second half of last year, and stands in contrast to the reversal that contributed to the first-quarter contraction.
Some economists said the inventory boost raised questions over whether the strong pace of growth in the second-quarter gain was sustainable. Real final sales, a measurement of GDP that excludes changes to inventories, expanded at a 2.3% pace in the second quarter. After accounting for the 1% contraction in the first quarter, sales rose by almost 0.7% in the first half of 2014. That suggests the inventory gain may have been “excessive,” said Chris Low, chief economist at FTN Financial, “as if business put a little too much faith in the bounce-back-from-bad-weather story.”
The report showed the personal consumption expenditure price index, the Federal Reserve’s preferred inflation gauge, advanced at an annualized 2.3% in the second quarter.
The reading, reflecting increased costs for food and gasoline, was above the Fed’s 2% inflation target during a quarter for the first time since early 2012. But from a year ago, consumer inflation is up a milder 1.6%.
On GDP, a Word of Caution on the RevisionsThere’s a reasonable chance the 4% 2Q GDP number will change. Consider what has happened to 1Q13. Growth was initially reported to be occurring at an annual rate of 2.5%, before being revised down to 1.8% and then 1.1%. Wednesday’s latest set of revisions brought that figure back to 2.7%. (email@example.com)
GDP Catches Up with Jobs Growth A strong rebound in 2Q economic growth resolves the discrepancy between recent weak GDP readings and strong job numbers, BNP Paribas economists write, adding the rebound bodes well for July jobs data out Friday. “We will get another solid payrolls print of around 225,000 on Friday,” the firm says. Still, BNP Paribas notes that an average growth rate of 1% in 1H shows the economy is far from achieving the 2.1% to 2.3% growth rate forecast by the Fed for this year. (firstname.lastname@example.org)
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Wednesday’s report also showed business spending on items such as equipment, buildings and intellectual property rose at a 5.5% pace from April to June. Spending on equipment increased at a 7% rate in the second quarter after declining in the first.
Residential fixed investment—spending on home building and improvements—increased at a 7.5% rate in the second quarter. The category had declined the prior two quarters. The decline that began last fall wasn’t actually due to a slowdown in home construction, but instead reflected a drop in brokers’ real-estate commissions after sales of previously owned homes slumped.
Trade was a drag on economic growth during the quarter despite a solid 9.5% increase in U.S. exports. That is because imports, which subtract from economic growth, rose 11.7%. Still, the number suggests renewed demand for foreign goods among U.S. consumers.
The government added to second-quarter growth. Government expenditures and investment rose at an 1.6% pace in the spring. Federal outlays fell for the seventh straight quarter but were more than offset by increased spending at the state and local level.
[Percent] Seasonally adjusted at annual rates
Last Revised on: July 30, 2014 – Next Release Date August 28, 2014
|1||Gross domestic product||2.3||1.6||2.5||0.1||2.7||1.8||4.5||3.5||-2.1||4.0|
|2||Personal consumption expenditures||2.8||1.3||1.9||1.9||3.6||1.8||2.0||3.7||1.2||2.5|
|7||Gross private domestic investment||6.9||5.8||1.6||-5.3||7.6||6.9||16.8||3.8||-6.9||17.0|
|12||Intellectual property products||0.7||5.1||2.6||5.1||6.5||-2.0||2.8||3.6||4.6||3.5|
|14||Change in private inventories||—||—||—||—||—||—||—||—||—||—|
|15||Net exports of goods and services||—||—||—||—||—||—||—||—||—||—|
|22||Government consumption expenditures and gross investment||-2.7||-0.4||2.7||-6.0||-3.9||0.2||0.2||-3.8||-0.8||1.6|
|26||State and local||-2.6||0.0||-0.6||-0.8||0.3||2.7||1.1||0.6||-1.3||3.1|
|27||Gross domestic product, current dollars||4.4||3.5||4.4||1.6||4.2||2.9||6.2||5.0||-0.8||6.0|
“We made up some of the ground lost in the first three months of this year, but there’s nothing in today’s data to indicate that the economy is growing more strongly than it has for the past couple of years,” the Economic Policy Institute, a left-leaning nonprofit group focused on low- and middle-income workers, said in a release Wednesday.
More important economic data will be released this week. Besides the Labor Department’s latest figures on unemployment and payrolls to be announced Friday, the Federal Reserve’s policy-making committee continues meeting on Wednesday, with the central bank announcing its latest plans on Wednesday afternoon.
Stocks start up then move down. Why, you ask?
It’s a disappointing day so far…the S&P 500 rocketed up almost eight points at the open, but within a half hour began a slow but steady decent into negative territory. What happened?
First: On the strong Q2 GDP, up 4.0 percent, there were detractors the minute the report came out.
A lot of inventory building, some complained. But most felt the numbers didn’t change their outlook for the second half dramatically. Barclays is a good example: “We do not view the outperformance in this report as a signal that the outlook for growth has improved,” they said.
Second: There’s the inflation-fearing camp. Modest growth or not, many fear that interest rates could move dramatically on any sign the economy is putting together a consistent series of above-expectation economic stats.
Treasury yields are up this morning, and many are wondering if the Fed will make some comment about the possibility of a rate increase sooner than expectations (mid-to-late- 2015).
I’m not in that camp, but some are: Interest-rate sensitive stocks like Utilities, Telecom, Housing are all underperforming the market.
Third: There are continuing issues with the Ukraine. Reuters is reporting comments from NATO that the number of troops continue to increase along the Russian-Ukraine border.
Finally: Let’s drag out the “market is tired” argument and that it is long due for a 10 percent correction. Alan Greenspan, on a competing network this morning, said stocks were due for a “significant correction” at some point. Really, Mr. Greenspan? The market IS tired, but we have been hearing about a 10 percent correction for two years. Those that got out then, when the S&P was at 1400, are now watching stocks up 40 percent since then.
My take? Things are continuing to get better, but they are getting better at a very slow rate. And the data is still choppy. And that is good for the markets.
* See the navigation bar at the right side of the news release text for links to data tables,
contact personnel and their telephone numbers, and supplementary materials.
|Lisa S. Mataloni:||(202) 606-5304||(GDP)||email@example.com|
|Jeannine Aversa:||(202) 606-2649||(News Media)|
|Nicole Mayerhauser:||(202) 606-9715||(Revision)|
|Brent Moulton:||(202) 606-9606|
Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 4.0 percent in the second quarter of 2014, according to the "advance" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 2.1 percent (revised). The Bureau emphasized that the second-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3 and "Comparisons of Revisions to GDP" on page 10). The "second" estimate for the second quarter, based on more complete data, will be released on August 28, 2014. The increase in real GDP in the second quarter primarily reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, exports, nonresidential fixed investment, state and local government spending, and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased. Box.___________ Annual Revision of the National Income and Product Accounts The estimates released today reflect the results of the annual revision of the national income and product accounts (NIPAs) in conjunction with the "advance" estimate of GDP for the second quarter of 2014. In addition to the regular revision of estimates for the most recent 3 years and the first quarter of 2014, GDP and select components were revised back to the first quarter of 1999 (see the Technical Note). More information is available in "Preview of Upcoming NIPA Revision" in the May Survey of Current Business and on BEA's Web site. The August Survey will contain an article describing the annual revision in detail. ________________ FOOTNOTE. Quarterly estimates are expressed at seasonally adjusted annual rates, unless otherwise specified. Quarter-to-quarter dollar changes are differences between these published estimates. Percent changes are calculated from unrounded data and are annualized. "Real" estimates are in chained (2009) dollars. Price indexes are chain-type measures. This news release is available on BEA's Web site along with the Technical Note and Highlights related to this release. ________________ Real GDP increased 4.0 percent in the second quarter, after decreasing 2.1 percent in the first. This upturn in the percent change in real GDP primarily reflected upturns in private inventory investment and in exports, an acceleration in PCE, an upturn in state and local government spending, an acceleration in nonresidential fixed investment, and an upturn in residential fixed investment that were partly offset by an acceleration in imports. The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 1.9 percent in the second quarter, compared with an increase of 1.4 percent in the first. Excluding food and energy prices, the price index for gross domestic purchases increased 1.7 percent, compared with an increase of 1.3 percent. Real personal consumption expenditures increased 2.5 percent in the second quarter, compared with an increase of 1.2 percent in the first. Durable goods increased 14.0 percent, compared with an increase of 3.2 percent. Nondurable goods increased 2.5 percent; it was unchanged in the first quarter. Services increased 0.7 percent in the second quarter, compared with an increase of 1.3 percent in the first. Real nonresidential fixed investment increased 5.5 percent in the second quarter, compared with an increase of 1.6 percent in the first. Investment in nonresidential structures increased 5.3 percent, compared with an increase of 2.9 percent. Investment in equipment increased 7.0 percent, in contrast to a decrease of 1.0 percent. Investment in intellectual property products increased 3.5 percent, compared with an increase of 4.6 percent. Real residential fixed investment increased 7.5 percent, in contrast to a decrease of 5.3 percent. Real exports of goods and services increased 9.5 percent in the second quarter, in contrast to a decrease of 9.2 percent in the first. Real imports of goods and services increased 11.7 percent, compared with an increase of 2.2 percent. Real federal government consumption expenditures and gross investment decreased 0.8 percent in the second quarter, compared with a decrease of 0.1 percent in the first. National defense increased 1.1 percent, in contrast to a decrease of 4.0 percent. Nondefense decreased 3.7 percent, in contrast to an increase of 6.6 percent. Real state and local government consumption expenditures and gross investment increased 3.1 percent, in contrast to a decrease of 1.3 percent. The change in real private inventories added 1.66 percentage points to the second-quarter change in real GDP after subtracting 1.16 percentage points from the first-quarter change. Private businesses increased inventories $93.4 billion in the second quarter, following increases of $35.2 billion in the first quarter and $81.8 billion in the fourth quarter of 2013. Real final sales of domestic product -- GDP less change in private inventories -- increased 2.3 percent in the second quarter, in contrast to a decrease of 1.0 percent in the first. Gross domestic purchases Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever produced -- increased 4.5 percent in the second quarter, in contrast to a decrease of 0.4 percent in the first. Disposition of personal income Current-dollar personal income increased $208.0 billion in the second quarter, compared with an increase of $176.6 billion in the first. The acceleration in personal income primarily reflected an upturn in personal dividend income and a smaller decrease in farm proprietors' income that were partly offset by a deceleration in wages and salaries. Personal current taxes increased $15.2 billion in the second quarter, compared with an increase of $24.4 billion in the first. Disposable personal income increased $192.7 billion, or 6.2 percent, in the second quarter, compared with an increase of $152.1 billion, or 4.9 percent, in the first. Real disposable personal income increased 3.8 percent in the second quarter, compared with an increase of 3.5 percent in the first. Personal outlays increased $138.8 billion in the second quarter, compared with an increase of $76.1 billion in the first. Personal saving -- disposable personal income less personal outlays -- was $682.9 billion in the second quarter, compared with $629.0 billion in the first. The personal saving rate -- personal saving as a percentage of disposable personal income -- was 5.3 percent in the second quarter, compared with 4.9 percent in the first. For a comparison of personal saving in BEA's national income and product accounts with personal saving in the Federal Reserve Board's financial accounts of the United States and data on changes in net worth, go to www.bea.gov/national/nipaweb/Nipa-Frb.asp. Current-dollar GDP Current-dollar GDP -- the market value of the nation's output of goods and services -- increased 6.0 percent, or $250.7 billion, in the second quarter to a level of $17,294.7 billion. In the first quarter, current-dollar GDP decreased 0.8 percent, or $34.3 billion. Box._____________ Information on the assumptions used for unavailable source data is provided in a technical note that is posted with the news release on BEA's Web site. Within a few days after the release, a detailed "Key Source Data and Assumptions" file is posted on the Web site. In the middle of each month, an analysis of the current quarterly estimate of GDP and related series is made available on the Web site; click on Survey of Current Business, "GDP and the Economy." For information on revisions, see "Revisions to GDP, GDI, and Their Major Components." _________________ Revisions for the first quarter of 2014 For the first quarter of 2014, real GDP is now estimated to have declined 2.1 percent; in the previously published estimates, first-quarter GDP was estimated to have declined 2.9 percent. The 0.8- percentage point upward revision to the percent change in first-quarter real GDP primarily reflected upward revisions to private inventory investment, to nonresidential fixed investment, and to PCE. Previous Estimate Revised Real GDP............................... -2.9 -2.1 Current-dollar GDP..................... -1.7 -0.8 Real GDI............................... -2.6 -0.7 Gross domestic purchases price index... 1.3 1.4 Revision of the National Income and Product Accounts The revised estimates reflect the results of the annual revision of the national income and product accounts (NIPAs). In addition to the regular revision of estimates for the most recent 3 years and the first quarter of 2014, this "flexible" annual revision results in revisions to current-dollar GDP beginning with the first quarter of 1999. The reference year remains 2009. When the estimates for the reference year (2009) are revised, the levels of the related index numbers and chained-dollar estimates are also revised for the entire historical period; revisions to percent changes before the first quarter of 1999 are small and mostly due to rounding. Because of the additional data shown, tables 3, 11, and 12 of this release are each divided into two separate tables -- 3A and 3B, 11A and 11B, and 12A and 12B. There are also a number of special tables that compare the revised and previously published statistics for select periods: * Table 1A shows the percent change in real GDP and related measures; table 1B shows revisions to current-dollar GDP, to national income, and to personal income; table 2A shows contributions to the percent change in real GDP; and table 4A shows the percent change in the chain-type price indexes for GDP and related measures. * Tables 7A and 7B show annual levels, percent changes, and revisions to percent changes for current-dollar GDP and for real (chained-dollar) GDP, respectively. * Table 12C shows revisions to corporate profits by industry. With the release of the annual revision, statistics for select NIPA tables will be available on BEA's Web site (www.bea.gov). Shortly after the GDP release, BEA will post a table on its Web site showing the major current-dollar revisions and their sources for each component of GDP, national income, and personal income. Additionally, the August 2014 Survey of Current Business will contain an article describing these revisions. That issue will also contain an analysis of the current quarterly estimate of GDP and related series ("GDP and the Economy"). Revisions to real GDP For this annual revision, the most notable revisions are generally limited to the period from 2011 through the first quarter of 2014 and largely reflect the incorporation of newly available and revised source data for the underlying components (see the box below). The revisions for earlier periods are small. * For 2011–2013, real GDP increased at an average annual rate of 2.0 percent; in the previously published estimates, real GDP had increased at an average annual rate of 2.2 percent. From the fourth quarter of 2010 to the first quarter of 2014, real GDP increased at an average annual rate of 1.8 percent, the same rate as in the previously published estimates. * The percent change in real GDP was revised down 0.2 percentage point for 2011, was revised down 0.5 percentage point for 2012, and was revised up 0.3 percentage point for 2013. o For 2011, the largest contributors to the downward revision to the percent change in real GDP were a downward revision to personal consumption expenditures (PCE) and an upward revision to imports. o For 2012, the largest contributors to the downward revision were downward revisions to PCE and to state and local government spending. o For 2013, the largest contributors to the upward revision were upward revisions to PCE and to state and local government spending; these revisions were partly offset by a downward revision to private inventory investment. * The revisions to the annual estimates for 2012 and 2013 reflect partly offsetting revisions to the quarters within the year. For 2012, the annual rate of change in GDP was revised down 1.4 percentage points for the first quarter and was revised down 0.3 percentage point for the third quarter, while the growth rate for the second quarter was revised up 0.4 percentage point; the growth rate for the fourth quarter was unrevised. The upward revision to the percent change in real GDP for 2013 reflects upward revisions to the first, third, and fourth quarters that were partly offset by a downward revision to the second quarter. * For the first quarter of 2011 through the first quarter of 2014, the average revision (without regard to sign) to the percent change in real GDP was 0.6 percentage point. The revisions did not change the direction of the change in real GDP (increase or decrease) for any of the quarters. * For the expansion from the second quarter of 2009 to the first quarter of 2014, real GDP increased at an average annual rate of 2.1 percent, the same rate as in the previously published estimates. * Current-dollar GDP was revised down for all 3 years: $15.9 billion, or 0.1 percent, for 2011; $81.4 billion, or 0.5 percent, for 2012; and $31.6 billion, or 0.2 percent, for 2013. Revisions to price measures * Gross domestic purchases -- From the fourth quarter of 2010 to the first quarter of 2014, the average annual rate of increase in the price index for gross domestic purchases was revised up from 1.6 percent to 1.7 percent. * Personal consumption expenditures -- From the fourth quarter of 2010 to the first quarter of 2014, the average annual rate of increase in the price index for PCE was 1.7 percent, the same rate as in the previously published estimates; the increase in the "core" PCE price index (which excludes food and energy) was revised up from 1.5 percent to 1.6 percent. Revisions to income and saving measures * National income was revised down $43.4 billion, or 0.3 percent, for 2011, was revised up $97.9 billion, or 0.7 percent, for 2012, and was revised up $34.7 billion, or 0.2 percent, for 2013. o For 2011, downward revisions to corporate profits and to nonfarm proprietors' income were partly offset by an upward revision to net interest. o For 2012, upward revisions to net interest, to nonfarm proprietors' income, and to corporate profits were partly offset by a downward revision to supplements to wages and salaries. o For 2013, upward revisions to nonfarm proprietors' income and to net interest were partly offset by downward revisions to farm proprietors' income and to wages and salaries. * Corporate profits was revised down $61.1 billion, or 3.3 percent, for 2011, was revised up $13.3 billion, or 0.7 percent, for 2012, and was revised up $4.8 billion, or 0.2 percent, for 2013. * Personal income was revised up $10.7 billion, or 0.1 percent, for 2011, was revised up $143.9 billion, or 1.0 percent, for 2012, and was revised up $32.2 billion, or 0.2 percent, for 2013. * For 2011–2013, the average annual rate of growth of real disposable personal income was revised up 0.1 percentage point from 1.7 percent to 1.8 percent. * The personal saving rate (personal saving as a percentage of disposable personal income) was revised up from 5.7 percent to 6.0 percent for 2011, was revised up from 5.6 percent to 7.2 percent for 2012, and was revised up from 4.5 percent to 4.9 percent for 2013. Gross domestic income (GDI) and the statistical discrepancy * For 2011–2013, real GDI increased at an average annual rate of 2.6 percent; in the previously published estimates, real GDI had increased at an average annual rate of 2.5 percent. From the fourth quarter of 2010 to the first quarter of 2014, real GDI increased at an average annual rate of 2.2 percent; in the previously published estimates, real GDI had increased at an average annual rate of 2.1 percent. * The statistical discrepancy is current-dollar GDP less current-dollar GDI. GDP measures final expenditures -- the sum of consumer spending, private investment, net exports, and government spending. GDI measures the incomes earned in the production of GDP. In concept, GDP is equal to GDI. In practice, they differ because they are estimated using different source data and different methods. * As a result of the annual revision, the statistical discrepancy as a percentage of GDP was revised up from -0.3 percent to -0.2 percent for 2011, was revised down from -0.1 percent to -1.3 percent for 2012, and was revised down from -0.8 percent to -1.3 percent for 2013. New and revised source data This annual revision incorporated data from the following major federal statistical sources: Source Data Agency Data Years Covered by Data and Vintage of Data ___________________________________________________________________________________________________________________________ Census Bureau Annual surveys of merchant wholesale trade 2011 (revised) Annual surveys of retail trade 2012 (new) Monthly indicators of manufactures, merchant wholesale trade, and retail trade 2011–2013 (revised) Service annual survey 2011 and 2012 (revised) 2013 (new) Annual surveys of state and local government finances Fiscal year (FY) 2011 (revised) FY 2012 (new) Monthly survey of construction spending (value put in place) 2011–2013 (revised) Quarterly services survey 2011–2013 (revised) Current population survey/housing vacancy survey 2011 and 2012 (revised) 2013 (new) ___________________________________________________________________________________________________________________________ Office of Management and Budget Federal Budget FY 2013 and 2014 (revised) ___________________________________________________________________________________________________________________________ Internal Revenue Service Tabulations of tax returns for corporations 2011 (revised) 2012 (new) Tabulations of tax returns for sole proprietorships and partnerships 2012 (new) ___________________________________________________________________________________________________________________________ BLS Quarterly census of employment and wages 2011–2013 ( revised) Survey of occupational employment 2012 (new) ___________________________________________________________________________________________________________________________ Department of Agriculture Farm statistics 2011–2013 (revised) ___________________________________________________________________________________________________________________________ BEA International transactions accounts 1999–2013 (revised) ___________________________________________________________________________________________________________________________ Changes in methodology and presentation The annual revision also incorporated improvements to estimating methodologies and to the presentation of the NIPA estimates, including the following: * Beginning with the estimates for 1999, the presentation of foreign transactions in the NIPAs is changed to reflect the comprehensive restructuring of BEA's international transactions accounts (ITAs), released in June. The new presentation of both goods and services in the foreign transactions tables is consistent with the corresponding items in the ITAs. The definition of exports and imports of travel is broadened to include travel for health and for education and expenditures by short-term workers; these services had previously been included in the exports and imports of "other" private services. The new presentation of foreign transactions enhances the quality and the usefulness of BEA's international accounts statistics and brings them into closer alignment with new international statistical guidelines. * The presentation of the pension sector is expanded to include a table of transactions of defined contribution pension plans and a table that presents transactions of both defined benefit and defined contribution pension plans. (Tables presenting the transactions associated with defined benefit pension plans were introduced in last year's comprehensive revision.) * * * BEA's national, international, regional, and industry estimates; the Survey of Current Business; and BEA news releases are available without charge on BEA's Web site at www.bea.gov. By visiting the site, you can also subscribe to receive free e-mail summaries of BEA releases and announcements. * * * Next release -- August 28, 2014 at 8:30 A.M. EDT for: Gross Domestic Product: Second Quarter 2014 (Second Estimate) Corporate Profits: Second Quarter 2014 (Preliminary Estimate) Comparisons of Revisions to GDP Quarterly estimates of GDP are released on the following schedule: the "advance" estimate, based on source data that are incomplete or subject to further revision by the source agency, is released near the end of the first month after the end of the quarter; as more detailed and more comprehensive data become available, the "second" and "third" estimates are released near the end of the second and third months, respectively. The "latest"” estimate reflects the results of both annual and comprehensive revisions. Annual revisions, which generally cover the quarters of the 3 most recent calendar years, are usually carried out each summer and incorporate newly available major annual source data. Comprehensive (or benchmark) revisions are carried out at about 5-year intervals and incorporate major periodic source data, as well as improvements in concepts and methods that update the accounts to portray more accurately the evolving U.S. economy. The table below shows comparisons of the revisions between quarterly percent changes of current-dollar and of real GDP for the different vintages of the estimates. From the advance estimate to the second estimate (one month later), the average revision to real GDP without regard to sign is 0.5 percentage point, while from the advance estimate to the third estimate (two months later), it is 0.6 percentage point. From the advance estimate to the latest estimate, the average revision without regard to sign is 1.3 percentage points. The average revision (with regard to sign) from the advance estimate to the latest estimate is 0.3 percentage point, which is larger than the average revisions from the advance estimate to the second or to the third estimates. The larger average revisions to the latest estimate reflect the fact that comprehensive revisions include major improvements, such as the incorporation of BEA’s latest benchmark input-output accounts. The quarterly estimates correctly indicate the direction of change of real GDP 97 percent of the time, correctly indicate whether GDP is accelerating or decelerating 72 percent of the time, and correctly indicate whether real GDP growth is above, near, or below trend growth more than four-fifths of the time. Revisions Between Quarterly Percent Changes of GDP: Vintage Comparisons [Annual rates] Vintages Average Average without Standard deviation of compared regard to sign revisions without regard to sign ____________________________________________________Current-dollar GDP_______________________________________________ Advance to second.................... 0.2 0.5 0.4 Advance to third..................... .2 .7 .4 Second to third...................... .0 .3 .2 Advance to latest.................... .3 1.3 1.0 ________________________________________________________Real GDP_____________________________________________________ Advance to second.................... 0.1 0.5 0.4 Advance to third..................... .1 .6 .4 Second to third...................... .0 .2 .2 Advance to latest.................... .3 1.3 1.0 NOTE. These comparisons are based on the period from 1983 through 2010. http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm
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Since taking office in 2009, President Barack Obama has formally proposed a total of 442 tax increases, according to an Americans for Tax Reform analysis of Obama administration budgets for fiscal years 2010 through 2015.
The 442 total proposed tax increases does not include the 20 tax increases Obama signed into law as part of Obamacare.
“History tells us what Obama was able to do. This list reminds us of what Obama wanted to do,” said Grover Norquist, president of Americans for Tax Reform.
The number of proposed tax increases per year is as follows:
-79 tax increases for FY 2010
-52 tax increases for FY 2011
-47 tax increases for FY 2012
-34 tax increases for FY 2013
-137 tax increases for FY 2014
-93 tax increases for FY 2015
Perhaps not coincidentally, the Obama budget with the lowest number of proposed tax increases was released during an election year: In February 2012, Obama released his FY 2013 budget, with “only” 34 proposed tax increases. Once safely re-elected, Obama came back with a vengeance, proposing 137 tax increases, a personal record high for the 44th President.
In addition to the 442 tax increases in his annual budget proposals, the 20 signed into law as part of Obamacare, and the massive tobacco tax hike signed into law on the sixteenth day of his presidency, Obama has made it clear he is open to other broad-based tax increases.
During an interview with Men’s Health in 2009, when asked about the idea of national tax on soda and sugary drinks, the President said, “I actually think it’s an idea that we should be exploring.”
During an interview with CNBC’s John Harwood in 2010, Obama said a European-style Value-Added-Tax was “something that would be novel for the United States.”
Obama’s statement was consistent with a pattern of remarks made by Obama White House officials refusing to rule out a VAT.
“Presidents are judged by history based on what they did in power. But presidents can only enact laws when the Congress agrees,” said Norquist. “Thus a record forged by such compromise tells you what a president — limited by congress — did rather than what he wanted to do.”
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