{"id":45697,"date":"2019-04-28T12:09:38","date_gmt":"2019-04-28T17:09:38","guid":{"rendered":"https:\/\/olduvai.ca\/?p=45697"},"modified":"2019-04-28T12:09:41","modified_gmt":"2019-04-28T17:09:41","slug":"fake-growth-exploring-the-big-mystery-in-fridays-gdp-report","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=45697","title":{"rendered":"Fake Growth? Exploring The Big Mystery In Friday’s GDP Report"},"content":{"rendered":"\n

Fake Growth? Exploring The Big Mystery In Friday’s GDP Report<\/a><\/h3>\n\n\n\n

We have become accustomed to the miraculous economic data ‘surprises’ that are propagandized out of China month after month – not too hot, not too cold, but just right – but in the latest US GDP data, as MarketWatch’s Greg Robb investigates, mystery theater comes to American government data…<\/p>\n\n\n\n

\"\"\/<\/figure>\n\n\n\n

It is a case that would make Sherlock Holmes proud.<\/strong><\/p>\n\n\n\n

Growth in the first quarter smashed expectations, fueled in part by strong inventory building. According to the government, $32 billion of goods were added to inventories this quarter, or $128 billion annualized.<\/strong><\/p>\n\n\n\n

\"\"\/<\/figure>\n\n\n\n

<\/a><\/p>\n\n\n\n

This stockpiling of goods boosted first-quarter GDP growth by about 70 basis points and helped propel growth to a 3.2% annual rate,<\/strong> well above forecasts.<\/p>\n\n\n\n

The problem is that it is not at all obvious where these inventories came from<\/strong>. Goods have to come from somewhere, either produced by domestic firms or imported from abroad.<\/p>\n\n\n\n

The mystery is that both production and imports fell in the first three months of the year,<\/strong> according to government data.<\/p>\n\n\n\n

\u201cYou can\u2019t stockpile what you do not import or do not produce,\u201d <\/strong><\/em>said Robert Brusca, chief economist at FAO Economics.<\/p><\/blockquote>\n\n\n\n

The Fed reported last week that industrial output slipped at a 0.3% annual rate in the first quarter.<\/p>\n\n\n\n

And the government\u2019s GDP report estimates that imports fell 3.7% in the first three months of the year.<\/p>\n\n\n\n

The one other explanation \u2014 that consumption fell sharply enough to leave businesses with unexpected unsold goods \u2014 also doesn\u2019t fit the evidence, Brusca said.<\/p>\n\n\n\n

Consumption did not fall faster than industrial production or imports to generate any surplus,<\/strong> he said. To be sure, spending on consumer durable goods fell 5.3%, the biggest drop in 10 years. Business spending on equipment was also weak.<\/p>\n\n\n\n

\u201cAny way you slice it, this GDP report…is an apparent mess,\u201d <\/strong>he said.<\/p><\/blockquote>\n\n\n\n

 \u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"

Fake Growth? Exploring The Big Mystery In Friday’s GDP Report We have become accustomed to the miraculous economic data ‘surprises’ that are propagandized out of China month after month – not too hot, not too cold, but just right – but in the latest US GDP data, as MarketWatch’s Greg Robb investigates, mystery theater comes […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[16695,391,827],"class_list":["post-45697","post","type-post","status-publish","format-standard","hentry","category-economics","tag-fake-statistics","tag-growth","tag-united-states"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/45697","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=45697"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/45697\/revisions"}],"predecessor-version":[{"id":45698,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/45697\/revisions\/45698"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=45697"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=45697"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=45697"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}