We’ve been in recession since at least December. Retail sales, which account for 67% of GDP have sucked for the last four months. Obamacare spending is the only thing that kept the 4th quarter GDP from being negative. Factory orders have crashed and it is clear to anyone with a functioning brain (disqualifies politicians, CNBC bimbos and boobs, and Ivy League trained economists) we are in recession. We’ve crossed the Blutarsky line.
GDP Now in Dangerous Waters
The Atlanta Fed has posted today that its GDP Now measure has reached exactly the same level as a certain Mr. John Blutarsky’s mid-term grade average. This is to say, it has declined to 0.0%.
GDP Now goes Blutarsky – via Atlanta FED
Watch the video below to see what such average grades can actually lead to.
Blutarsky achieves mid-term grade average of 0.0%
The question is now … is the US economy eligible for military service? Or should it just vomit over someone’s desk?
Perhaps someone would like to start a poll?
In the meantime, we note that the US economy is still struggling. Never in the last 60 years have we had such a weak run of GDP figures. And it looks like this funk is here to stay. The US economy depends on consumer spending. And consumers ain’t spending.
Here’s Bloomberg:
“A booming job market and cheaper fill-ups at the gas pump should be giving millions of Americans more reasons to spend. Instead, they’re salting away the extra savings.
The saving rate jumped in February to 5.8%, the highest since December 2012 and up from 4.4% just three months earlier, government data showed Monday.”
The rest of the Bloomberg report repeats the usual nonsense. Spending growth is “woefully weak as disposable incomes rise.” Woefully?
You know better, dear reader: There’s nothing woeful about saving money. Spending doesn’t make you wealthier. Saving and investing do. Spending is not woefully weak; saving is gloriously, wonderfully, happily strong. Americans are saving more – despite the authorities’ efforts to stop them.
The Fed evaporates interest payments on savings. It threatens higher levels of inflation. It offers the cheapest credit in history. And still consumers resist. Why?
They know that solvency matters. Household finance is not just a matter of liquidity. Besides, they also know that the economy is not nearly as strong as the feds say it is.
The first quarter, for example, showed the worst retail sales and corporate profits since 2009. Wall Street may be on a tear. But most people are struggling to make any forward progress at all.
They sense, correctly, that they will need more than just the feds’ easy credit in the coming months; they will need real savings.
Bill Bonner
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If not for trillions in “stimulus” and trillions and trillions for this that and the other, the stats wouldn’t have shown improvement,
then, as that was fading away, up jumped the Census and its millions of jobs and billions of spending (btw, it still isn’t completed and it has been FIVE years)
then, as the Census started to fade, up popped the BLS changing GDP and adding in Research & Development and Goodwill (and upticked the mergers and acquisitions, go figure)
then, as the bump from that became immaterial (2 years out, no more bump in year over year comparisons), up jumped the trillions in O’care spend to get the program up and pretending to run.
then, as THAT bump became immaterial, along came the ACTUAL Obamacare spending bump which appears to be HUGE. Amazing how if the government pays for 15% of food sales (actually more) and 50-75% of pharmaceutical sales, how great everything looks.
Of course, throw in the high-frequency traders, dark money flooding bond markets, leveraging to buyback stock and then increasing dividends, along with the rest and I guess we are nearing the end of the current illusion line.
No worries, though, if history is to be my guide, we are getting ready to have either a major failure and subsequent market crash and/or a major, bordering on world, war.
Either way the economy and GDP and these stupid little charts win.
The government will be spending more, the people will have less, but day-uhm according to GDP it will all look like milk and honey.
Every metric used to measure “our” economy contain fallacies, and out and out lies.
I’m almost over my lifelong need to read them, use them, as if they hold meaning to our world.
I’m guessing the GDP will continue to “grow” even as our houses turn dark and our citizens stand cold and hungry waiting for handouts.
Why people, not even most financial and accountants, can SEE what has happened over the past 30 years is beyond me. Common freaking sense once you learn how gov spend, manufacturing and production (and their theft) is counted into GDP.
Allowed the decimation of manufacturing while showing “growth” in GDP.
This time the falsities will be covering up the decimation of the REST of the economy. Good times ahead
I keep hearing about a possible recession? WTF!
Hey! If I do your laundry and you pay me $20 and you do my laundry and I pay you $20, we have just increased the GDP by $40.
So, lets get busy and do each others laundry. The country need you.
Come on! Just move the chart down, leave the blue line where it is…See? No problem. I learned this at Yale.