Skip to comments.2013 GDP Growth Rate Closer to -1.75%
Posted on 09/21/2013 11:34:54 AM PDT by NaturalBornConservative
Phony Government Statistics: GDP
- By: Larry Walker, II -
There are six things that the Lord hates, seven that are an abomination to him: haughty eyes, a lying tongue, and hands that shed innocent blood, a heart that devises wicked plans, feet that make haste to run to evil, a false witness who breathes out lies, and one who sows discord among brothers. ~ Proverbs 6:16-19 ~
Gross Domestic Product (GDP) is one of the broader measures of economic activity and is the most widely followed business indicator reported by the U.S. government. But according to Economist Walter J. Williams of Shadow Government Statistics, Upward growth biases built into GDP modeling since the early 1980s have rendered this important series nearly worthless as an indicator of economic activity... With reported growth moving up and away from economic reality, the primary significance of GDP reporting now is as a political propaganda tool and as a cheerleading prop for Pollyannaish analysts on Wall Street.
On August 29, 2013, the Federal Government reported that Real Gross Domestic Product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 2.5 percent in the second quarter of 2013 (that is, from the first quarter to the second quarter), according to the "second" estimate released by the Bureau of Economic Analysis (BEA). In the first quarter, real GDP increased 1.1 percent. (The BEA will release its final number for the second quarter 2013 on September 26, 2013, at 8:30 A.M. EDT.)
However, this GDP headline number refers to the most-recent quarters annualized quarter-to-quarter rate of change (what that quarters percent quarter-to-quarter change would translate into if compounded for four consecutive quarters). This can mean that the latest quarter can be reported with a positive annualized growth rate, while the actual annual rate of change is negative, as was the case for the 3rd quarter of 2009. So is the economy really growing or not?
Note: The chart above, courtesy of ShadowStats.com, shows Annual Growth (Year-to-Year Percent Change). This is not the annualized quarterly rate of change that serves as the headline number for the series.
According to Shadow Government Statistics, the annual growth percentage change in GDP for the second quarter 2013, based on Official BEA data, was a mere 1.64%. However, when the aforementioned upward biases, inserted into GDP since 1984, are removed, the annual growth percentage change for the second quarter 2013 was actually more like -1.75%.
In fact, if you study the chart above, in conjunction with source data courtesy of Shadow Government Statistics, other than an anemic growth rate of less than 0.51% for the first, second, and third quarters of 2004, based on pre-1984 methodology, annual GDP growth has been negative ever since the second quarter of 2000.
Even worse, every time the BEA makes a new Pollyannaish change in its GDP reporting methodology, all prior data is restated back to the year 1929. For example, according to Shadow Government Statistics, methodological changes made in 2004 led to increases in previously reported GDP of 2.86% for 1980, and 5.25% for 1990 (see table below).
Unless this nonsense is reigned in, I suspect that in the near future, the Great Depression will be referred to as the Booming 30s. Should you wish to study this topic further, please take a few moments to read the series authored by Walter J. "John" Williams, Government Economic Reports: Things Youve Suspected But Were Afraid To Ask!
The Bottom Line: Nearly every key statistic reported by the Federal Government is a lie. Virtually every word emanating from Washington, DC is a lie. Although the American people may be exceptional, the Government of the United States, as it stands today, has strayed so far from the mark that there will be none other to blame as it seals its own demise.
Related: Black Unemployment Rate Closer to 37.9%: Phony Government Statistics, Detroit and Black Americans
Looks like Shadowstats is branching out.
If anyone knows about "a lack of good-quality hard data", it's John Williams.
Do you know if he makes money doing what he does? I mean, anyone can draw graph with a line on it, and draw another line underneath.
That's awful. Show us how you calculate your key statistics, John.
Someone noted that despite his claims of much higher than reported inflation, he hasn't raised his subscription rate in years and years.
OMG! Spanked by Krugman. LOL!
Is that true? Darn shame, if it's the case: one would imagine that his subscription rate would more closely match his stated inflation rate.
Only in the diseased, perverted “mind” of the libtard could a negative number be associated with “growth”.
Government is growing & that’s the only growth they care about.
Williams' methodology is set out at his website.
I don't see Paul Krugman disagreeing with Williams' conclusions.
Don't keep us hanging, share the fun.
I wonder if the real Walter Williams made him change his name?
Lies? No there damn lies.
“Williams’ methodology is set out at his website.”
‘Don’t keep us hanging, share the fun.’
Maybe you could cut and paste the methodology you saw?
That's statistical noise. A rounding error is more significant.
And, besides, GDP is a worthless indicator of economic growth. Capital growth alone leads to economic growth. Consumer spending and government spending are interesting figures to look at but they don't build new factories or hire new employees.
When you consider that GDP includes govt. deficit spending, real GDP is really negative 3 or 4%.
Oh come on! He uses the same methodology that the federal government used to use prior to 1984. It’s not rocket science, it’s that every few years the federal government changes formulas to make the public feel better. We’re actually in as bad a shape as the chart shows, and most people know that.
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