Is That All There Is? US GDP Expands At Only 2.9% Pace While Slowdown Signs Mount (Like M2 Money Slowing To -1.31% YoY And PCE Growth Less Than Forecast)

Confounded Interest ^ | 01/26/2023 | Anthony B. Sanders

[Kaiser8408a]

Today’s GDP report from the BEA reminds me of the Peggy Lee song “Is That All There Is?” Between the massive Fed monetary stimulus since late 2008 (and particularly since Covid in 2020) and all the Federal spending (Covid relief, Inflation reduction, Omnipork spending bill, etc.), US real GDP rose by only 2.9% in Q4 from Q3.

But signs of slowing underlying demand mounted as the steepest interest-rate hikes in decades threaten growth this year.

Gross domestic product increased at a 2.9% annualized rate in final three months of 2022 after a 3.2% gain in the third quarter, the Commerce Department’s initial estimate showed Thursday.

Personal consumption, the biggest part of the economy, climbed at a below-forecast 2.1% pace (forecast was for 2.9%). Again,

The report also showed some signs of stress for American consumers whose wages have failed to keep up with inflation and continued to encourage them to draw down savings accumulated from government pandemic-relief programs.

Core PCE growth grew at 3.9%, but is slowing already as M2 Money growth dies.

The world’s largest economy expanded 2.1% last year. In 2021, when demand snapped back from pandemic-related shutdowns, the economy grew 5.9% — the best performance since 1984.

The GDP data showed services spending increased at 2.6% annualized rate in the October-December period, the slowest since last year’s first quarter. Outlays on goods rose at a 1.1% pace, the first advance since 2021.

Business investment slowed sharply after a third-quarter surge. Spending on equipment declined an annualized 3.7%, the most since the second quarter of 2020. Outlays for structures rose at a 0.4% pace.

Let’s hope the BEA isn’t padding the numbers like the BLS was caught doing in the first half of 2022.

[Kaiser8408a]

Government spends YOUR money inefficiently.

[Huskrrrr]

“Let’s break out the booze and have a ball.”

[EBH]

The report also showed some signs of stress for American consumers whose wages have failed to keep up with inflation and continued to encourage them to draw down savings accumulated from government pandemic-relief programs.

Does anyone else find this "encouragement" counter productive, especially IF anyone has any stimulus funds left!

Plus they are trying to quell demand, so drawing down savings means spending and increasing demand?

I follow a lot of economics channels and experts, but this I do not understand? The FED cannot have it both ways.

[Boogieman]

“the steepest interest-rate hikes in decades”

That’s not actually saying anything, since there have been zero interest rate hikes (and zero or negative interest rates) for the last 15 years.

[ConservativeInPA]

Government spends YOUR money inefficiently.

That, and it spends money it doesn’t have inefficiently.

[VTenigma]

So GDP expands at 2.9% while inflation expands at 8.6%. Sounds like a 5.7% contraction to me, but then again I’m using cisheteropatriarcle math.

[Sequoyah101]

This looks bogus just on the face of it. The fed can’t have it both ways, putting on the brakes and growing the economy.

I don’t think a thing this gooberment says is trust worthy.

[libertylover]

Yeah, and everything costs a lot more than it did just a few years ago too.

[Vaduz]

Depression omen inches on

[sauropod]

.