Friday, November 9, 2012

US Economy in Freefall?

Where the US Economy is headed:  Beep Beep!               (c) Warner Bros
Click here for related report [US Dept of Commerce]

For those of you inclined to wonder how the economy is doing, here's an extract from the Bureau of Economic Analysis Third Quarter Report on the US Gross Domestic Product [GDP], which the Bureau attempts to paint in a positive light.

The Third Quarter economic results were a disaster; but, this information was not carried in the Main Stream Media, even though it was released two weeks before the election; not that the average voter could make heads or tails out of the convoluted bureaucratese presented.  So, we've taken the basis of the report and translated it for you.

[GDP is the output of Goods and Services produced by labor and property in the USA]

"The acceleration in real GDP in the third quarter primarily reflected

/>1) An upturn in federal government spending,

TRANSLATION:  The Government increased spending [food stamps, welfare payments, etc.]

2) a downturn in imports,  

TRANSLATION:  Consumers bought fewer imports [e.g., TVs, Blue Rays, foreign cars, etc.]


Containers look similar - with less content - higher price
3) An acceleration in PCE  [Personal Consumption Expenditures] 

TRANSLATION: Consumers spent more because prices were higher.  Real inflation is increasing dramatically; grocery staples like bread and meat have doubled or tripled in price in the last few years.  Suppliers are altering their containers with smaller volumes, but charging slightly more.


4) A smaller decrease in private inventory investment, 

TRANSLATION:  Consumers bought fewer durables [e.g., cars, TVs, refrigerators,  etc]. 
Note the wording "smaller decrease" which translates that consumers had severely reduced their spending in the second quarter, but in this quarter it wasn't quite as bad.

5) An acceleration in residential fixed investment,  

TRANSLATION:  The number of foreclosures declined, and some existing foreclosures were purchased by investors.


6) A smaller decrease in state and local government spending that were [sic] partly offset by downturns in exports and in nonresidential fixed investment."

    a)  State and local governments spent more of what was left of the Stimulus money,
    b)  But that spending was offset by fewer US exports
    c)  There were fewer US exports due to
          (1) Increased labor costs/taxes
          (2) Lower production
          (3) Businesses shutting down and not renewing their leases
          (4) A halt in construction of new office buildings or facilities
                [e.g., warehouses, manufacturing plants, etc.

All of the above translates to a faltering economy and a harbinger of further economic deterioration 
-- and massive inflation under the continuing Obama Administration.

Romney may be glad he lost the election!