Tuesday, August 4, 2009

Government: Inflation Is Zero (And other odd things)

John Williams, of ShadowStats.com, reports that some very quirky things helped boost the recently announced Q2 GDP number.

The government lowered the inflation rate it uses in the GDP calculation to almost zero. A near zero inflation rate means the government hardly had to adjust downward its raw GDP number.

Further, as Williams points out, there was no good news out of the durable goods sector. New orders for durable goods, were down 25% from the same time last year.

So what did boost GDP?

Barry Ritholtz reports that the trade deficit distorted the GDP. Goods imported by Americans fell by a much larger amount than the decline in our exports---which boosted GDP.


No comments:

Post a Comment