Headlines blared “US Economy Grew at Vigorous Pace in Last Quarter“. Of course, according to our economic statistics, yes, we saw 5.7% annual growth in the US economy. Unfortunately, however, this is just another sign of how detached our Washington statistics are from what’s really going on and why the headlines get it all wrong.
The analysis of the news is pretty much that since businesses kept next to no inventory in Q3, this was a natural adjustment as they had to place orders to replenish stock. I’m not a big fan of looking at GDP numbers to gauge the health of the US. Instead, I look at the middle class. What’s the real unemployment rate, counting those who are underemployed or have given up because there are no jobs anywhere near them (still over 17%). How many people have lost their homes this month and how is that number trending? How many people have fallen behind on their mortgages this month? Are people falling farther behind on their credit card payments? These numbers show no signs of improvement, and any talk of great economic growth his laughable in the face of the vast majority of the country just struggling to get by. After years of manipulation of statistics and foolishness in the general operation of the economy, we now have a detached economy where what you see going on stage has nothing to do with what’s going on behind the curtain.
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