Editor’s Note – Once again the federal government is providing a new set of statistics, this time on the GDP for Q1 of 2014. Of course SUA is skeptical as always due to all the proven times that statistics from the government have been manipulated, or even gathered in a new fashion that makes comparisons difficult at best.
Today we find that GDP has grown, but at a very anemic rate, and it is in comparison to Q4 of last year, but prior to that, we know that the manner in which the GDP is calculated has changed during the Obama administration. Here is an excerpt from Forbes on the latest report:
The U.S. economy grew in the first quarter — but very, very, very slowly. Most economy watchers blame frigid winter weather for dampening forward progress but not everyone is convinced weather tells the whole story.
The Bureau of Economic Analysis’ advance estimate of first quarter 2014 real gross domestic product shows output produced in the U.S. grew at a glacial 0.1% rate. This is growth relative to fourth quarter 2013, when real GDP increased 2.6%. Economists were anticipating growth around 1.1%.
“Real GDP growth was quite a bit weaker than already feeble expectations,” wrote Guy Berger, U.S. economist at RBS, in a note on the results. ”Q4’s GDP report was the inverse of today’s – it had a relatively strong headline, ho-hum details (today we got a weak headline, ho-hum details).”
The spin of course is always applied, but since GDP now includes many questionable numbers, a 0.1% increase is not really just anemic, it is more likely to actually be negative, and could conceivably be thought of as the beginning of a new recession. However, no matter how it is viewed, no growth is where we are.
It is very similar to how jobless numbers are counted, and less than believable, but in reverse. In the job reports, whole segments of society are not counted as unemployed skewing the reported numbers, and in the case of the GDP growth, it adds in new categories – thus the inverse relationship of bogus ways to report on our economy. Here is an excerpt from Money News back in August 2013 about the GDP changes:
So how is GDP really calculated?
GDP = private consumption + gross investment + government spending + (exports − imports), or
GDP = C + I + G + (X – M)
The government has now made a significant change in the gross investment number (I), which now includes research and development (R&D) spending, art, music, film royalties, books and theatre. This change in GDP statistics has not been implemented elsewhere in the world. So the United States is the first to accomplish this rewriting of the GDP number.
R&D spending, which shouldn’t even be accounted for as investment, adds a significant amount to the GDP number — it accounts for around 2 percent of U.S. GDP. Art, music, film royalties, books and theatre add another 0.5 percent.
Another adjustment has been made to pension accounting. Previously, pension spending was included in GDP. After this adjustment, however, we also look at the “promise” to pay out pensions. So we are talking about imaginary numbers that are now included in GDP. (Read the rest at Money News.)
When we have opportunities for growth, it seems that Obama and team find a way to throw impediments before them at every turn, i.e. – Keystone XL, regulations, end runs around Congress, and litigation, picking winners and losers.
Obama is the ‘Assassin’ of growth and opportunity here in the US and the anemic numbers show that after five years of his policies, growth was never one of them.
All he has done is throw more layers of control like PPACA like a wet blanket over any growth opportunity.
With this all in mind, we now see that we are fast becoming number two in the world behind China. Read this report below on the growth of China, where there is real growth because they are loosening the controls on the economy while we are throwing impediments in the way of ours. As China becomes less socialistic, we are fast becoming more socialist:
From China Daily Mail
The U.S. is on the brink of losing its status as the world’s largest economy, and is likely to slip behind China this year, sooner than widely anticipated, according to the world’s leading statistical agencies.
After extensive research on the prices of goods and services, the ICP concluded that money goes further in poorer countries than it previously thought, prompting it to increase the relative size of emerging market
World Bank, are the most authoritative estimates of what money can buy in different countries and are used by most public and private sector organisations, such as the International Monetary Fund. This is the first time they have been updated since 2005.figures, compiled by the International Comparison Program hosted by the
The estimates of the real cost of living, known as purchasing power parity or PPPs, are recognised as the best way to compare the size of economies rather than using volatile exchange rates, which rarely reflect the true cost of goods and services: on this measure the IMF put US GDP in 2012 at $16.2tn, and China’s at $8.2tn.
In 2005, the ICP thought China’s economy was less than half the size of the US, accounting for only 43 per cent of America’s total. Because of the new methodology – and the fact that China’s economy has grown much more quickly – the research placed China’s GDP at 87 per cent of the US in 2011.
For 2011, the report says: “The US remained the world’s largest economy, but it was closely followed by China when measured using PPPs”.
With the IMF expecting China’s economy to have grown 24 per cent between 2011 and 2014 while the US is expected to expand only 7.6 per cent, China is likely to overtake the US this year.
The figures revolutionise the picture of the world’s economic landscape, boosting the importance of large middle-income countries. India becomes the third-largest economy having previously been in tenth place. The size of its economy almost doubled from 19 per cent of the US in 2005 to 37 per cent in 2011.
Russia, Brazil, Indonesia and Mexico make the top 12 in the global table. In contrast, high costs and lower growth push the UK and Japan further behind the US than in the 2005 tables while Germany improved its relative position a little and Italy remained the same.
The findings will intensify arguments about control over global international organisations such as the World Bank and IMF, which are increasingly out of line with the balance of global economic power.
When looking at the actual consumption per head, the report found the new methodology as well as faster growth in poor countries have “greatly reduced” the gap between rich and poor, “suggesting that the world has become more equal”.
The world’s rich countries still account for 50 per cent of global GDP while containing only 17 per cent of the world’s population.
Having compared the actual cost of living in different countries, the report also found that the four most expensive countries to live in are Switzerland, Norway, Bermuda and Australia, with the cheapest being Egypt, Pakistan, Myanmar and Ethiopia.