Posted on 01/26/2023 7:05:05 AM PST by Vermont Lt
Real gross domestic product (GDP) increased at an annual rate of 2.9 percent in the fourth quarter of 2022, after increasing 3.2 percent in the third quarter. The increase in the fourth quarter primarily reflected increases in inventory investment and consumer spending that were partly offset by a decrease in housing investment.
Interesting that much of the increase is based on growing inventories. That is not usually a good sign.
My impression is that there is an awful lot of money floating around the economy and it is only slowly being drained from autos and real estate. An inflection point will be reached at some point (maybe Marchish?) and then the pendulum will swing heavily into contraction as everybody redeploys for the next big thing.
Government spending is a significant portion of GDP. It always has been a part since GDP calculation were first derived by Keynesian economists. Keep that in mind when interpreting GDP figures. No single economic indicator provides a complete understanding of the economy. Each has it’s purpose and requires analysis beyond, if x > y, then things are good.
I consider government spending dubious economic activity, particularly since massive portions of government spending is financed on debt and simply printing money. That is not economic activity.
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