<<Second quarter real GDP growth was revised upward to 3.3% from a previously reported 1.9%. Exports played a key role, as did personal consumption. The revised GDP number shows the economy is faring far better than many pessimists believed. Moreover, trends in the data suggest third quarter GDP will expand at a similar rate.>>
Chris Martenson commented on the revised GDP on his site.
chrismartenson.com
Shame on the New York Times for printing propaganda and then charging for it. That should be free.
When this report of 3.3% growth for the second quarter came out, I laughed out loud. That is how preposterous it was. Besides this completely rigged report by the government, almost every other, non-fudgeable number is in agreement; we are in a deep recession.Cars, houses, retail, job claims, the ECRI, you name it - they all say "recession".
How did they arrive at this very funny 3.3% reading? Two ways.
First, they had to concoct a massive upward revision to exports.
Next, they did something that shocked even me; they knocked inflation for the second quarter of 2008 to only 1.3%, the second lowest reading in of the past 15 quarters.
That is, the claim they are making here is that inflation for April, May, and June was down, and down a lot. Here’s the picture:
See that yellow circle? That’s the amount of inflation that was subtracted for the nominal GDP reading to derive the so-called “real” GDP that was just reported. Today that term “real” took on new, ironic overtones. Let’s review a few of the things that actually happened during April, May, and June. Here’s the CPI for that period:
Even as badly mangled as the CPI data is, it averaged 4.38% for those three months – a full 329% HIGHER than the number used to calculate the GDP.
Gas prices hit a record, oil prices hit a record, food inflation edged close to double digits, and yet, through all of this, the US government puts out an completely preposterous number of only 1.3%, utterly secure in the knowledge that nobody, not even the New York Times, would ask so much as a single uncomfortable question about whether or not this is a believable number. In fact, the NYT did the opposite, by immediately pointing out that this surprisingly strong GDP reading suggests 'resiliency' in the economy.
And Wall Street rallied hard on this news today, just as they were supposed to. However, anybody who bought stocks on this news was defrauded and will almost certainly regret the decision. |
