quote:
Once again the BEA has used "deflaters" that will strain the credibility of the public, especially if they buy gasoline. To correct the "nominal" data into "real" numbers the BEA assumed that the annualized inflation rate during 1Q-2012 was 1.54%. As a reminder, lower "deflaters" cause the reported "real" growth rates to increase -- and once again very low seasonally adjusted BEA inflation "deflaters" have been the headline number's best friend. If the raw "nominal" numbers were instead "deflated" by using the seasonally corrected CPI-U calculated by the Bureau of Labor Statistics (BLS) for the same time period, nearly the entire headline growth rate vanishes -- and the resulting growth rate would have been a minuscule 0.08% with "real final sales" contracting.
Comment:
If I understand this correctly, the BEA is underestimating inflation, which in turn, overestimates real GDP growth. Just goes to show you, there are lies, damn lies, and statistics.
Maybe charts don't lie as much. This one says economic growth since WWII is slowing down. The dotted red line is a statistical trend line over the period and it is going down.
Update:
It takes over 2 bucks debt to get 1 buck of GDP growth.
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