The Bureau of Economic Analysis released the Fourth Quarter GDP (Q4) data today [DATA HERE], and the White House will likely spin a victory message. However, the real economic picture is covered by the continued storm of inflation.
Gross Domestic Product (GDP) is the dollar value of all goods and services produced in the economy, minus the dollar value of goods and services we import. The percentages discussed are percentages of change over time.
The fourth quarter result was an increase of 6.9 percent over the prior quarter.
The total U.S. economy is now estimated around $23 trillion annually. [Tables pdf Here]
What the GDP doesn’t show is the diminished purchasing value of the dollar and/or the actual rate of inflation which towers over the valuation. With goods and services costing much more, the estimated value of those goods and services (the amount of money spent on them) increases.
Because we are in a severe inflationary cycle, the resulting evaluations of the economy are skewed. The BEA attempts to remove the inflationary impact of their evaluations, but they do so by using a 5.5% inflationary rate, which is a much lower inflation estimate than actually exists.
Essentially, there is so much inflationary noise in the prices of goods and services, any calculations by the government are simply estimates of what they think the value of the underlying economic activity is worth. Bean counters are paid to count beans with rules on what each bean is worth. If the rules are wrong, the valuation result from the counters is wrong.
To give you an idea of how far these figures can be flawed, let me share an example of costs from a company and sector that touches all our lives.
DOW chemical is likely the one company in the world that generates more originating products and raw materials than any other. DOW touches your life and is likely the raw material provider for almost everything around you. DOW generates petroleum chemicals, plastics, rubber and solvents that are in virtually everything.
From cars, clothes and furniture to plastics, Styrofoam and containers, DOW is the originating manufacturer of almost all of it. Dow provides the originating material in the supply chain that is then carried forward into all levels of manufacturing.
One sentence from Dow is all you need to see to understand what the current rate of inflation is within the supply chain:
“Prices climbed 39% in the fourth quarter from a year earlier, while volumes fell 4%.” (link)
The cost of producing and processing the industrial products that Dow handles jumped 39%. Those massive increases in costs are at the very beginning of the supply chain. Those prices are then passed along to the next level of manufacturing, and then the next level of component creation, and then the next level of assembly, until a final product is created, sold, transported and delivered to the seller.
The beginning product, the raw material, starts with a 39% increase in price. That is the scale of origin level inflation that works its way through the system until it finally reaches us.
Notice, Dow also said the net volume of their product outputs “fell 4%.” So, they made less stuff at a much higher price.
Take that example and overlay it into the GDP consideration. Remember, the GDP isn’t a measure of the actual outputs of stuff created, the Bureau of Economic Analysis is only measuring the aggregate value of the stuff, ie. what it’s worth.
- 20 trillion units at $1.00 per unit equals $20 trillion dollars.
- 20 trillion units at $1.05 per unit equals $21 trillion dollars.
- An increase of 5% in economic valuation (GDP), but we haven’t created a single product more.
Did our economy expand at 6.9% in the fourth quarter? Or are we just seeing the increased valuation of goods and services, while the actual outputs in the economy are shrinking?
Did you pay 20% more at the grocery store and leave with 20% more food stuff? Or did you pay 20% more at the checkout and leave with the same or less food stuff than previous?
I think we all know the answer to those questions.
Checkbook economics is the only economics that matters.
When I heard the “news” about the growth, that was exactly my first thought. How much of that was inflation?
Whatever they can do to make the numbers look good is what they will do.
Let his supporters believe it. I can’t wait to see the pain on their faces!
Only the LOONEY LIBTARDS will believe it, while they pay $2 more for gas and food prices going through the roof.
His supporters are obscenely wealthy and could care less about paying more OR they are welfare slugs that just got a nice cost of living increase that offset the inflation. What is left of the middle class are taking the financial beating.
No, “his supporters” are not just, or even primarily those you describe.
Have you seen thec
recent videos, of A) two “senior” women nonsensically assaulting a young black man in an elevator, for not wearing a mask, B) the woman insanely railing against someone attending the anti-mandate rally in D.C.?
THOSE are his supporters, in large part. And while yes, they are in both cases women, their are PLENTY of deluded cuck men who share their distorted world view.
They are NOT “obscenely wealthy”, nor are they “welfare slugs”; I suspect most are “comfortable” i.e. “upper middle class”, and that in reality MOST are relying on/addicted to using credit to live slightly beyond their means.
And, they will get SQUEEZED horribly, by this inflation. They live their lifestyle, driving nearly new cars, living in “nice” houses in “nice” neighborhoods, “keeping up with the joneses” and in reality, just BARELY keeping their “head above water” financially.
They have NO “cushion”, no “emergency fund”; and simply CAN NOT continue their lifestyle, with their costs climbing far faster than their income.
The obsenely wealthy won’t be effected, your probably right there. Food stamps increased 25 percent, and can presumably be increased further. But, those with too much income to qualify, yet not obscenely wealthy, and addicted to credit, are a LOT of Bidens “support”, and they are going to hurt, and be pissed.
Can Brandonistas continue to delude these idiots that “Trump” and his supporters are the cause of all this? Maybe, they are delusional all ready,..
You just described teachers.
When you let millions cross your border and give them free money, it is an instant boost to GDP. Helps to smooth over the rot.
Papering over the problem with greenbacks!
If you move manufacturing to China, you have to hide the GDP loss somewhere. If you do not hide the problem, you might be forced to admit there is a problem. GDP is a fiction based on deficit spending which doubles with every President. Remove the “free” money injection and things look entirely different.
All big companies, banks, retail, etc throw money at a problem orrrrr to go along with the woke. Seek the Lord first. His will be done, not ours.
Reminds me of the criminal treasonous Clinton Administration’s magical “surplus”. Didn’t they rip off Social Security to “cook” the books?
Did they ever report the huge amount of money they took from Communist China to sell out and betray America?
Every administration uses overpayment of SS “surplus” to cook the books. By stealing the surplus, you lower the amount of debt issued to fund the government in the open market and there is less pressure on the bond market helping to keep interest rates low.
So Biden exceeded Trump’s best annual GDP. Trump never got a 3% year but Biden did year one.
Oh boy. The lefties will be crowing about this one.
Shameful.
Didn’t read the article then?
Didn’t get the point, then?
And to think Biden benefited from a bogus shutdown, Trump’s rebound, and a funny money GDP inflation to do it.
Makes me sick.
Made this same comment on the Presidential Thread. How does GDP grow given the following??
Domestic Production output Drops.
Domestic purchases of major GDP creating items is declining.
Skilled Employment in GDP related jobs is Declining.
Number of NEW Domestic IPO’s is DOWN.
Inflation no matter how it is calculated exceeds cited gain of 6.9%.
The Balance of Trade in GDP items is on a steep decline having reached a “historical” NEGATIVE $1 TRILLION and getting worse.
Plus, not a single month has gone by since 20 January 2021 where the economic metrics “reported” by JoeBama’s Team have not been adjusted to the BAD by 50-100%.
Figures lie and liars figure. An old one but absolutely true.
Or, “Lies, damned lies, and statistics.”
This report is akin to having Peter Dinklage stand behind a podium to give a speech about how he grew 3 feet and is now 6’3″ despite the fact the camera never pans away or moves behind him to show that he is standing on a ladder. All that matters is that he appears to be taller and thus can now proclaim it to the morons.
And when all is said and done Twitter will be celebrating Peter’s newfound height while banning all and any proof that shows he was standing on a ladder.
Biden is a waking nightmare! He won’t be happy until we achieve this!
HAVANA, Jan 26 (Reuters) – The Cuban peso was trading at nearly 100 to the dollar on the informal market Tuesday, according to a trader and online trackers, a depreciation of more than 30% in less than a month and four times the fixed official rate. https://www.reuters.com/world/americas/cuban-peso-free-fall-against-dollar-2022-01-26/
That would mean Cuba is having worse inflation than the U.S. If our dollar is shrinking in value so that it takes more dollars to buy the same things we have been buying, then Cuban peso is shrinking even faster in net purchasing value. Thus it now takes even MORE pesos just to keep up with our shrinking dollar than previously.
I’m pretty sure Biden doesn’t want to be outdone by Cuba!
I honestly don’t think people understand what is about to hit them. They need to pay off their credit cards if they have them and ditch them now. Don’t buy property, and don’t buy a car! In fact, if you have an old vehicle now is the time to sell it! They cost as much as new!
No, if you have an older vehicle, now is the time to make sure it is in top running shape, and assuming your food stockpile is “good” stock up on motor oil, filters, brake pads, radiator hoses and belts.
Selectively, depending on model. The VALUE of an older, well maintained and running auto will ONLY go up.
And yes, get the heck off the credit train; it is signing the papers that enslave you. Like “volontary commitment” papers to a mental hospital, its checking in to “Hotel California”, except it IS possible to leave.
You just have to make a total break, and no longer desire a “good credit rating”
Actually, if you have reliable income and can still get a very low fixed-interest loan to buy a car or house, why not?
In an inflationary period, the payments remain fixed while the purchasing value of the outstanding principle dollars shrinks. If your salary is increased with COLAs or other reasons, your loan payment decreases as a percent of income.
The actual value of the vehicle depreciates, while the value of the house may appreciate (if purchased in a desirable area) BUT these values should move in accordance to the asset’s value in current dollars.
Cuba has a two tier money system. Peso of one color for the peasants another color for tourists and elite.
Really keeps the citizenry down and the black market in dollars thriving. US dollars, euros, etc not accepted, got to go to Cuban govt bank to get correct currency.
Anything to do with polls or numbers provided by a government bureaucracy in my book comes under the title fiction sub category decepticon.
While the illegitimate administration’s economy is in the crapper, it resorts to smoke and mirrors, and desperately pushes the narrative, that what you see isn’t really want you’re seeing.
20 trillion @ $1.05 would be 21 trillion total.
A 5% increase.
When the headlines don’t match the reality, you know you’re being lied to – plain and simple.
Apparently they don’t even believe their own #’s; Social Security put in a 5.9 percent COLA increase, starting Jan 1, 2022.
They actually are deluded that if Biden or Psaki SAYS it, the dumb rubes will BELIEVE it, and that reality is irrelevant, only what they SAY reality is, is important.
That HAS worked, for many years, but by trashing their credibility, it doesn’t work any more, but they keep using it, as if it still works.
They are victims of their own dillusions. The best, most effective lieing is when the person lieing, convinces themselves they are telling the truth.
Problem is, at a certain point the liar becomes disconnected from reality.
And, being disconnected from reality, is a pretty good definition of insanity.
Yeah, SS got a COLA and Medicare premiums went up 16%. Elders got a 10% haircut.
Only those who didn’t “opt out” of medicare, personal choice based on individual situation, of coarse.
Yet another advantage if “being your OWN DR.”, and making healthy lifestyle choices, knowing every decision is a gamble, entailing risk.
Really? I just had 3 different types of cancer, Had 3 minor and one major 8 hour surgery over the last 18 mos.. To suggest I be my own Dr. is ludicrous, I d not smoke drink lightly, exercise etc. Glad I have Medicare as I would of spent over 200k of my money to be here writing you. So say I self funded, who is going to do the surgery and at what hospital . Kind of a smug generalized statement to make. Maybe you can afford to pop that kind of money and not feel the pinch of being dependent on ss. or a pension. I can not.
100% agree!!!!!!
Not an accurate statement, unless SS payment = Medicare premiums.
They have been disconnected from reality for well over a year. When you have the media parrots and the social media fascists to tell everybody that you are wrong and they are telling the truth, the disconnect comes at very little cost for them.
Here is a good example of fiat versus real money and the impact of inflation.
The first U.S. $20 gold piece was minted in 1849. It weighed 33.436 grams and contained 30.09 grams of gold. At that time the official rate of exchange of U.S. paper dollars for a troy ounce of gold [31.1 grams ] was $20.00 So the gold in the $20 gold piece was worth $19.35. This morning gold on the New York futures market is trading at $57.686 per gram, or $1735.76 for the $20 gold piece. When Nixon pulled gold from backing the dollar in 1972, a troy ounce of gold was pegged at $35.00.
“When Nixon pulled gold from backing the dollar in 1972, a troy ounce of gold was pegged at $35.00.”
Every year since, the trade deficit has grown larger.
But Nixon encouraged and welcomed China into the global market and by the ’90s they were awarded MFN (Most Favored Nation) status. THAT became a significant contributor to our shrinking dollar…not to mention gutting our nation’s once-mighty manufacturing base.
So it seems Tricky Dick wasn’t so slick.
But———that was GEORGE BUSH——-who fought for MFN status !!!!!!
Yes. My point was that Nixon naively invited Communist China into the Community city of trading partners, which China then proceeded to financially bully and abuse to the detriment of the USA.
I don’t think the US had anything resembling paper dollars until United States Notes, made legal tender, were issued during the civil war. The use of these notes, aka “Greenbacks” became an issue after the war. In general Wall Street money interests wanted a return to gold only, while Main Street feared a contraction in money supply. The National Bank Act also allowed National Banks to issue “National Bank Notes” under direction of the Comptroller of the Currency but didn’t become a significant factor due to banks not seeing them as particularly profitable. The Specie Resumption Act of 1873 worked to pull US Notes out of circulation. That didn’t help in the financial panics that resulted from railroad bonded debt combined with European wars (such as Franco-Prussian) which soaked up available specie. The result was demand on Main Street for “Bimetal” making silver a legal tender. Recall the “Cross of Gold” speech of William Jennings Bryant. (I’ve seen an interesting study of “Wizard of Oz” arguing that it is an allegory of the battle over gold, the “yellow brick road” leading to wonderful Emerald City run by all-knowing Oz (McKinley) who was really a carny con man.)
That gold could work at all in those days was due to great increase in supply from Alaska.
I stepped on my scales and celebrated the gains – but how much of that was fat and how much of that was muscle?
Depends on who is doing the calculating. Give me the underlying #s and tell me the result you want. No problem.
Inflation is part of the story. Businesses restarting after being shuttered also contributes to the growth number. The fairer comparison is not 2021 4th quarter to 2020 4th quarter, it is 2021 to 2019 prior to the covid shutdowns.
Compare real wages, job growth, workforce participation, price of goods, productivity etc. from those two time periods to compare economic policies.
Biden is benefitting from the Trump economic foundation that allowed for a massive rebound (from a bogus shutdown) combined with a later inflation-skewed GDP bump that had not quite destroyed things quickly enough to show in the true GDP number. It’s coming.
Biden gets one highly flawed “good” first year number despite Trump’s lower 2.9% year actually being better in REAL terms.
Nauseating. And it will be used to claim the leftist economic philosophy of destruction is a success.
SMH.
This is a tsunami in reverse.
“Change in private inventories added a whopping 4.90% to GDP, up from 2.2% in Q3, a huge increase which accounted for over 70% of the bottom line 6.9% GDP print.”
https://www.reuters.com/business/us-goods-trade-deficit-widens-december-imports-2022-01-26/
WASHINGTON, Jan 26 (Reuters) – The U.S. trade deficit in goods widened to a record high in December as imports increased for a fifth straight month amid strong domestic demand, suggesting that trade likely remained a drag on economic growth in the fourth quarter.
But imports are helping to replenish depleted inventories, with the report from the Commerce Department on Wednesday showing strong restocking at retailers and wholesalers last month.
Solid inventory accumulation likely offset the impact on gross domestic product from the larger trade gap, prompting some economists to raise their growth estimates for the last quarter.
So very impressive that the GDP has increased by 6.9% in absolute dollars, not.
Inflation is certainly in the double digit range, what that implies is that the economy has actually contracted in relative terms when you factor in the inflation to the economic activity.
“…minus the dollar value of goods and services we import.”
Russian oil (imported!) currently accounts for ~10% of domestic consumption. Is it even remotely possible that GDP is greater now than when we were net energy exporters under Trump’s administration?
Only a chump would find the BEA’s analysis to be credible.
I know I’ve been listening to Sundance for awhile when I knew the spin they were going to share and how he would blow it up. I get educated here everyday.
Sundance, educates us in multiple subjects, along with other insights from other Treepers.
Monday the U.S. IHS Markit flash composite Purchasing Managers Index(PMI), one of the first comprehensive looks at economic growth this year, fell to 50.8 in January from 57.0 in December, severely undershooting expectations and signaling almost no growth in the economy. Economists had forecast a reading of 56.7.
[above 50 indicates an expanding economy, below 50 indicates a contracting economy]
I can almost feel the growth as my wallet gets thinner.
“There is no Pravda in Izvestiya and there is no Izvestiya in Pravda”
The patient has rosy cheeks, so he must be fine, even though he has no heartbeat.
Trade deficit tops $1 trillion for first time
https://thehill.com/policy/finance/591478-trade-deficit-tops-1-trillion-for-first-time
As I listened to the daily spew of Uni-News on the 7s today, this claim that the GDP had grown 6.9% was the primary talking point. The number seemed awfully close to the 6.9% inflation claimed earlier by ‘the other side’. All I know is my money is worth less and goods and services cost more. Great breakdown in article:
“Dow provides the originating material in the supply chain that is then carried forward into all levels of manufacturing.
One sentence from Dow is all you need to see to understand what the current rate of inflation is within the supply chain:
“Prices climbed 39% in the fourth quarter from a year earlier, while volumes fell 4%.”
Although this article is appreciated, I already don’t believe ANYTHING coming from the government….or from the Enemedia. So whatever numbers, statistics or data comes from the government (or from the media via the government) it’s already nothing but useless propaganda to me.
You are correct, sir.
(BJ from AT says hey.)
Gosh, they put a lot of thought and planning into their lies.
Then the mean Trump supporters demolish the lies with facts and data.
Poor little liars. It must suck to be so pathetic.
Except “vaccines” they dont lie about vaccines.
Do you sense the long knives are coming out for our Dear Old leader, uncle joe ‘you son of a bit*h’ biden? From many sources comes news stories that are bad for joe–from his side of the fence reporters. I use the lower case for joe because he is gutter trash who sold his soul for lucre 50 years ago to anyone who offered him a deal he could take and hide from the general voting public while he did his show of nice guy who is so sensitive, etc.
Hillary and Michelle are warming up in the cowpen, but will mooch be willing to take second spot?
Save the border integrity of Ukraine but erase the USA border, plus give super benefits to those illegals while letting American Veterans camp out on the sidewalks of America begging for survival.
The emotives have had their run, now come the rationales to run the show…after the knock down fight we are about to have! The spirituals are going to just pray and pray, as they do until they hit the stake and the fires surround them!
Pure numbers don’t lie…people/entities with agendas MAKE numbers lie.
I don’t listen to what the bureaucrats shovel … I listen to the screams from my wallet at the prices it sees and the persuasion I receive in the need to reduce my weight … hey, if food’s too expensive, eat less and lose weight.
But I won’t change one important tune …
FJB
Most of the people who see this BS # are going to think the same way as you. How come I am almost spending double on food now.
Packages are half the size from 12 to 18 months ago???🤔🤔 (snark).
Who you going to believe Your lying eyes or my narrative.
Math-A-Magicians !
My comment is not so much about inflation but the company. Dow Chemical’s competent technicians and their innovated labs and facilities (R&D) will eventually dumb down. The company is replacing their retiring staff with the woke diversity mob.
The people on this site know that these marxist wannabes lie about everything else,so no different for this either.Stay alert,stay strong,don t be fearful.When I pray everyday I always include Psalm 68,Let God Arise and His enemies be scattered.We are all here at this time for the Almighty s purpose,so do what you need to do.Ephesians 6:12-13 (New International Version)
For our struggle is not against flesh and blood, but against the rulers, against the authorities, against the powers of this dark world and against the spiritual forces of evil in the heavenly realms. Therefore put on the full armor of God, so that when the day of evil comes, you may be able to stand your ground, and after you have done everything, to stand.
There is no finer example of the Biden administration, than the 3 part series on HBO, Chernobyl.
You forgot to put the image of ‘ Bagdad Bob’ at the bottom of the article .
Like the fake CDC Coronavirus Death Count, the BLS inflation statistics and Democrat poll numbers the GDP reported today is just another fabricated number shaped to make Biden look much good and advance a Leftist narrative!
A few months from now it will be adjusted to -3% or something, after they get all the high-fives out of the lie.
You can fool the people with COVID, vax, Jan 6th “Insurrection”, and many other lies, but they are fully aware of the cost of goods. GDP number means nothing, the checkout line does.
Example: A bag of Hershey’s chocolate hearts now is between 25% to 30% smaller than last year and the price is slightly higher. V-Day will be very expen$ive.
Shrinkflation is here. Seeing the pkg size shrink to hide the real price increase of the product.
It’s off topic but… how about those Canadian truckers?
I try to respect the site rules, but it seems increasingly hard to keep “things” seperated into seperate folders,…
Covid bleeds over to economy, culture into politics, its all a mish mash!
Yeah, how bout them Truckers? Truedope can NOT back down, as I am pretty sure Truckers can not just accept a rescinding of the mandate, since he could reinstate it once they disband.
So, they need to stay as long as he remains in office. I fear it will turn to violence, and if it does, I hope the responce is overwhelming support for the Truckers.
Hacked and release cell phone calls, from Trudope to govt officials, discussing options would be useful.
You can bet he is consulting with other “World leaders” on how to respond.
Sure I believe the government statistics.
Broken Down Old Trucker: “Sir, would you admit that your overly optimistic GDP numbers vs the skyrocketing inflation felt by U.S. consumers cancels out any benifit that your crashing economic policy or rather lack of it- would in anyway help the average American worker?” Joe International Child Sex Trafficker Biden: “Stupid Son of a Bitch”
Went to the store today. Bell peppers 80 cents each, cucumbers 79 apiece. Yellow onions were 49 cents per pound and they were the least increase of anything else in the store. 5 pounds of #2 oranges were a whopping $9.12. It will be very expensive to eat much of anything in another year and I hate to think of what it will be like two years down the road.
Shift from stockpiling, which can only last so long, to growing your own.
Start now, cause their is a “learning curve” to gardening, just like with anything.
Make your mistakes, and learn from them NOW, rather than when you totally depend on your own-grown food to survive.
I don’t believe those numbers. I don’t care if they are reported nominal or real. I don’t believe them.
There’s really no reason to believe anything coming from the US government.
And when there is a month of 1-2% compared to the year before that month the hoot and holler. Nothing will be said that month in the prior year was 6-7% from the year before and the 2 year inflation is 6-8%. And the prices ain’t coming back down.
The “economic growth” of a gallon of gas over the last month is $.30 or about 10%. Biden can spin all he wants about economic growth, but consumers know what they are having to pay and that kind of economic growth is eating money.
I’m always amazed these last few months the amount of effort this administration, its supporters, handlers, all politicians, and government-at-large put into the lies they spin. And for what? So, they can cling to the money trough while deluding themselves there will never be any accountability?
All for naught, as few believe any of it; and to those who do believe, are you satisfied?
The vast majority of their energy is expended on false narratives which have one common to all, intentional result; DIVIDING the American people into factions.
Pro-Trump vs Anti-Trump, Pro vs anti CC, CRT, And now Pro vs anti mandates.
Divide and conquer, THATS the unifying concept that binds virtually all their lies.
They will always depend on the stupidity of the average American. I sincerely hope at least Fox news point this flaw out. Not enough people read the treehouse.
Faux news is controlled opposition, Newsmax is Faux news 2.0.
It is the lazy conservative indeed, who doesn’t recognise they are controlled opposition, and seek out news source alternatives.
Yea. And our first gay president had an unemployment rate under 8.
The machinations that take place for any of these criminals to stay popular to their followers is mind boggling.
6.9% … curiously, the inflation rate is 6.9%. Fascinating.
Just like the Obama years, they would claim unemployment was down and they created lots of jobs. The numbers sounded good but what they didn’t tell you was…..
The “jobs” they created were not much more than minimum wage and / or through a temp employment service. Also unemployment claims were down because people’s benefits ran out. Keep this in mind when layoffs start due to supply chain issues and inflation.
My favorite statistic from the Obamboozler years, “jobs saved”.
😂
The Bolsheviks running the White House are using a tried and true formula they learned and practiced from 1910 to 1990 in the Soviet Union:
“The rules are simple: they lie to us, we know they’re lying, they know we know they’re lying, but they keep lying to us, and we keep pretending to believe them”
Elena Gorokhova, A Mountain of Crumb
biden administration is in total numbers manipulation mode. On EVERYTHING!