muses of the moment

January 30, 2013

Economist inadvertently discloses that “recession” will continue

Filed under: The Federal Reserve, The Financial Crisis, Unemployment, US Government Debt — totallygroovygirlfriday @ 1:47 pm

Update (1-31-13): to combat the spin on the GDP release, here is John Williams of shadowstats.com summary:

– Although Recovery Never Took Place, Official Double-Dip Recession Likely Will Be Clocked from Second- or Third-Quarter 2012
– Reported Contraction in Real GDP Designed to Discourage Fiscal Reform?
Fourth-Quarter Nominal GDP Growth Collapsed to 0.46% from 5.91%
– Real Durable Goods Orders Contracted Year-to-Year, Despite Temporary Orders Boost from Year-End Defense Spending

“Frankly, this is the best-looking contraction in U.S. GDP you’ll ever see,” Paul Ashworth, an economist at Capital Economics, said in a note to clients.

Click here for full article.

The spin, the spin on the CONTRACTION in GDP this morning is truly priceless. Contraction has finally reared its ugly head last quarter as John Williams and other has been saying for some time now with their real stats. Really, we never had a recovery.

Call it what you will, GDP contracted last quarter and no manipulating of official stats could hide it.

However, brilliant economists everywhere say, no fear, because….

Economists said the surprise decrease in the nation’s gross domestic product wasn’t as bad as it looked. The weakness was primarily the result of one-time factors. Government spending cuts and slower inventory growth subtracted a total of 2.6 percentage points from growth.

Those volatile categories offset a 2.2 percent increase in consumer spending, up from only 1.6 percent in the previous quarter. And business spending on equipment and software rose after shrinking over the summer.

“Frankly, this is the best-looking contraction in U.S. GDP you’ll ever see,” Paul Ashworth, an economist at Capital Economics, said in a note to clients. “The drag from defense spending and inventories is a one-off. The rest of the report is all encouraging.”

Groovygirl is confused, how are government spending and defense cuts a one-off? Do they know of a new war somewhere the US is going to engage in?

The US is in major debt, the bond market is under pressure, the Fed’s “printing” produces less and less, and the politicians keep kicking the “cliff” down the road. GG sees no increase in government spending, but a continued decrease.

GG also completely attributes the increase in consumer spending on inflation in prices and nothing else. (Real inflation rate is 10%.)

This contraction must continue, the only way it can (at least) net out is further inflation in prices.

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4 Comments »

  1. GG,

    There are two wars left that are on the horizon that they are planning for … the first will be Syria. Once you see US troops on the ground in Syria start the clock for the war in Iran. … Our government is hellbent on war … I’m not sure why.

    Comment by MikePhila — January 31, 2013 @ 11:33 am

  2. Boosts GDP?

    gg

    Comment by totallygroovygirlfriday — January 31, 2013 @ 12:16 pm

  3. GG,

    Nah … I think we are like Great Britain in the 17 & 1800s … empire building … or at a minimum, taking out those that we don’t like …

    Here is a link discussing it from Wesley Clark himself. There IS a plan that is being executed behind the Curtain of Oz. … kind of scary.

    http://www.salon.com/2007/10/12/wesley_clark/

    Comment by MikePhila — January 31, 2013 @ 12:52 pm

  4. Interesting link….

    gg

    Comment by totallygroovygirlfriday — January 31, 2013 @ 3:12 pm


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