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GDP Miss Far Bigger Than Announced; Real GDP is 0% Using More Reasonable Deflator

Ms Kelly Wrote: Apr 28, 2012 1:44 AM

After pinching and scraping for several months, my husband and I managed to accumulate $2,000. We thought we could spend the money on some badly needed home repairs that have gone unaddressed for quite a while. Then we got our spring property tax bill. $2,004. Guess those home repairs will have to wait. We will likely have the money about November…just in time for the fall property tax bill. Is it any wonder Americans are suffering? If the Fed. government isn’t taking your money, the state is.

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GDP Miss Far Bigger Than Announced; Real GDP is 0% Using More Reasonable Deflator

The Advance Estimate for Q1 GDP came in at 2.2%, down from 3.0% in the previous quarter, and below most mainstream media estimates of 2.5%.

However, my friend BC notes ....

The GDP deflator is reported to have averaged 1.2% annualized in the past 2 qtrs. Had the trend rate from '11 persisted, the deflator would have subtracted 2.6% annualized from real GDP, resulting in a 2-qtr. growth of real GDP of 0%.

ECRI's Achuthan would appear correct that a recession were imminent instead of looking like a dummy.

Rick Davis at the Consumer Metric Institutes makes a similar calculation.