The Bureau of Economic Analysis (BEA) released the First Quarter GDP figures today [DATA HERE] showing the U.S. economy contracted -1.4% in the first quarter.

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 first quarter result was an annualized rate of negative 1.4 percent, meaning the U.S. economy is shrinking.   However, this should not come as a surprise as the primary driver of our GDP is consumer spending.  With everything costing more, less stuff is purchased.  Less stuff purchased leads to less stuff generated.

While the first quarter result of -1.4% is not a surprise, in the commonsense perspective, the fact that BEA didn’t revise the fourth quarter result of +6.9% is a little eye opening.  There’s no way in an apples-to-apples valuation the U.S. economy goes from +6.9% to -1.4% in one quarter.  Instead, what we are seeing is the effect we mentioned when the Q4 result was announced.  The BEA is modifying their assumptions by increasing the inflation rate in their calculations of the value of goods and services.  They really didn’t have a choice.

You might remember my prior opinion that the Q4 numbers were very overinflated because of two factors: (1) they underestimated inflation; and (2) the December 2021 import data from the Port of Los Angeles (POLA) was missing [NOTE: remember, Buttigieg was there in November and POLA supervisors are on team Biden].  I said at the time that if my hunch was correct the first quarter 2022 import data would be magnified by the December POLA data being added.  Remember, imports are a deduction to the GDP equation.

Well, what shows up in Q1?  A massive increase in first quarter import data that surprised everyone.  Go figure… lol.

Let’s look at the data

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Perhaps no media paragraph more perfectly encapsulates the issues around the Twitter debate than this one from New York Times writer Shira Ovide:

…”The 2016 U.S. presidential election and the Brexit vote that same year gave Silicon Valley executives, U.S. elected officials and the public a peek into what can go wrong when social media companies opt not to wade too deeply into what people say on their sites.”… (link)

In essence, that would be the quiet part said out loud and matter-of-factly.  If people are allowed freedom of communication, they end up doing things without our approval.

That paragraph perfectly encapsulates the reason why so many media and leftists are having mental breakdowns.

Elon Musk has the audacity to purchase one, just one, social media platform with the intent to allow Americans the freedom to speak to each other freely, without limit and control.  That is the expressed risk the Democrats, media and leftists in every institution are enraged about.

As Fox News highlighted, “several Twitter employees expressed serious concerns and fear over Musk’s $44 billion acquisition of the company including a prominent worry that Musk would undo censorship mechanisms they had worked to implement over the years.”  It’s all about control.  We are living in a cyber version of Poland circa early 1980’s.

The solidarity movement results in millions of Polish citizens taking to the streets, looking around and suddenly realizing there are more of us than them.  That is what the collective left is now desperate to avoid, and they will do anything to stop people from seeing the scope of the control effort they have deployed in order to carry out their agenda.  Those are the stakes at play.

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Goya Foods CEO Bob Unanu appeared on Fox Business earlier today in order to give a bigger picture review of the current status of food production. Unanu does a good job outlining how the interconnected systems from field to fork impact consumers.  The Goya CEO appropriately outlines what is happening and what the consequences are from Biden energy policy.  It’s a good interview.

Unanu does not push food alarmism and accurately states the U.S. food production system will ensure that food is available for U.S. consumers to purchase, albeit at higher prices.  The people most at risk from food insecurity are developing countries who rely on exports of food products generated by efficient, productive and exceptional farming operations in North America that feed the world.

For U.S. consumers it is the massive increases in energy and transportation costs that are driving up food prices, putting the issue of food insecurity into the correct context of food affordability.   WATCH:

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Consumers can offset the price impacts by shopping closer to the field, the origin of the food purchases needed.  Shopping for fresh food products at farmers markets avoids feeling the impact of shipping and transportation costs, and it helps the local economy.  If you are near areas with farm production in the United States consider the financial value of skipping the convenience of the supermarket in favor of shopping closer to the field.

In the field to fork food supply and distribution system, the closer you can get to the field for purchases the less costs you will encounter.  Obviously, for many people this may not be possible.  However, for others it might be time to evaluate the cost of convenience.

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The Biden administration has created a crisis at the U.S-Mexico border by enticing migrants, removing the remain in Mexico policy, and doing nothing to stop the massive influx of illegal aliens.

When asked if the White House feels any responsibility for the death of National Guardsman Bishop Evans, who drowned while attempting to rescue two drug smugglers, a callous, cold and dismissive Jen Psaki says:

...”I would note that the National Guard worked for the states, and so he is an employee of the Tex- — Texas National Guard, and his efforts and his operation were directed by there, not by the federal government, in this — in this effort, in this apparatus.”

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The level of callousness in this response is sickening.  Bishop Evans would never have been in that situation if it wasn’t for the specific ideological policies creating unlawfully open borders by the Biden administration.

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Obviously, the office of White House Chief of Staff Ron Klain is urgently contacting pollsters to measure how the base of the party would feel if the administration did not challenge the federal court ruling that overturned the federal mask mandate for transportation.

The far-left is on its heels after a Tampa judge overturned the CDC’s legal framework for the mask mandate rule, and the TSA changed their guidance.  Most of the Biden support base, the Covidians, define themselves through the virtue signaling of wearing a mask. However, all of the airlines quickly abandoned rules for masks during travel, and the overwhelming majority of Americans cheered.

Now, the Biden DOJ finds themselves in a hot political place.  Biden is stuck between the mentally and emotionally unstable Covidians (10%) and the normal Americans (90%).  If the DOJ doesn’t challenge the ruling, the Covidians will be even more mad. [Psaki Transcript Here]

(WASHINGTON DC) – […]  White House press secretary Jen Psaki, speaking to reporters aboard Air Force One en route to New Hampshire, said the Justice Department was still reviewing the ruling and noted that these reviews typically take a few days. She pointed out that the CDC had said previously it needed 15 days to evaluate public health data related to the mask mandate.

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Lots of people talk about an inflation driven recession.  Essentially, that’s a total economic contraction in the value of goods and services produced, sold and purchased, due to rising prices.   However, as CTH has been pointing out for more than six months, if you subtract the federal COVID infusion money from the overall economy, we have been in a contracting demand economy for almost nine months.

A negative GDP outcome is quite possible, perhaps likely, when the first quarter GDP figures are released on the last Friday of this month.  The most recent sales and economic data shows that U.S. consumers are prioritizing spending and high priced durable good sales are negative.

Now, Fannie Mae is delivering a rather stunning shift in their economic forecast.  In addition to projecting a recession for 2023, these revised home purchase figures are remarkable:

...”We have downgraded our total home sales forecast for 2022 to a decline of 7.4 percent (previously a 4.1 percent decline) followed by a decrease of 9.7 percent in 2023 (previously a 2.7 percent decline).” (link)

That is a very significant change in home sales forecast to the negative position.

We already have serious energy inflation to contend with and low wage growth.  We already know a third inflation wave on highly consumable goods is coming this summer, likely around 30% or more in food prices at the grocery store.

The professional forecasts are always tilted toward the positive for this administration, so this new statement by Fannie Mae should be considered accordingly.  Remember, Boy Scouts motto.

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It’s a weird dynamic.  Like Neil Oliver said in his weekend monologue, we are supposed to ignore this stuff and pretend this is okay.   We are supposed to look at this and make believe it’s just normal, yet nothing about this is okay.  We are supposed to just laugh it off.

Not only is it just plain weird, but ultimately this game of pretending is just dangerous.  WATCH:

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The view from the reverse angle is even more concerning.

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This Sunday segment from CBS’s Margaret Brennan allows us to watch narrative engineering in real time.  During a segment outlining the reasons behind the major economic issues American’s are feeling, CBS notes everything except the reason the economy is struggling.  It really is quite a remarkable example of professional gaslighting.

Watch the segment, note the inflation crisis has been underway for more than 18 months, and notice how many justifications are made-up illusions. (1) A Texas-Mexico cargo checkpoint issue that started less than a week ago; (2) Trucker shortages; (3) Ukraine-Russia which started only 6 weeks ago; and (4) Pandemic lockdowns, now causing an excess in demand.  None of these issues are even close to the source of the issue.

The two major drivers of inflation are both Biden policy issues.  (1) Extreme federal government spending and the Fed purchasing debt. (2) The shutting down of U.S. energy development (pipelines closed or blocked, oil leases cancelled, permits pulled and refinery permits cancelled).  All of this is Joe Biden policy.

On the restaurant pricing side, and likely restaurants soon to close, I would note the CTH outline from a few days ago:

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The ASEAN (Association of Southeast Asian Nations) region including India, comprises a combined population of 1.85 billion people, one-fourth of the global population. Thailand, Malaysia, Indonesia, Singapore, Philippines, Brunei, Vietnam, Cambodia, Myanmar (Burma), and Laos are included.

As Biden doubles down on a proxy war against Russia in Europe, and given the financial stakes within the western economic sanctions, the global trade cleaving could leave the countries around India with a decision on which financial trade mechanisms they will support.

This is the background for Joe Biden to organize a special summit of ASEAN leaders in Washington, DC, May 12th and 13th.

WHITE HOUSE – President Biden will host the Leaders of the Association of Southeast Asian Nations (ASEAN) in Washington, DC on May 12 and 13 for a U.S.-ASEAN Special Summit.

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The U.S. Census Bureau {LINK} reports the March retail sales data {pdf LINK} showing a contraction in sales overall (excluding gasoline) and a massive contraction in on-line sales.  As we expected, we are seeing the continued demand side contraction for non-essential purchases.

First, when you review the data, keep in mind all of the statistics are based on dollars.  Currently the BLS calculates the rate of inflation at 8.5 percent year over year. So, when we look at retail sales figures, we must remember the items being sold cost more.  Any reported sales figures in a sector that do not exceed the inflation in that sector, indicates decline in units sold.

The top-line for March retail sales is 0.5% growth; however, the rate of inflation is 8.5%, so the amount of goods sold is substantially less than the 0.5% dollar increase would indicate.  Subtract the sales of gasoline (w/ massive price increases), and retail sales are negative (-0.3%) in March.  SEE TABLE-2

A good category to note the contraction in non-essential purchases is electronics and appliances.  Again, CORE inflation in that segment is around 6%, and yet total sales were only 3.3% higher, meaning less actual units sold.  Compared to 2021, electronics and appliance sales dropped 9.7%.

Showing how much people are pinched, gasoline prices are around 60% higher than this time last year, yet gas station sales only increased by 8.9%.  This means people are buying a lot less fuel at much higher prices.  People have shifted their transportation habits because gas costs so much.

Two more very interesting notes:

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