The US Government’s Economic Growth Numbers are Wrong
Harvard Economist Martin Feldstein warned Friday that the US government’s measure of economic growth is always wrong, regardless of the official number.
The US economy grew less than previously reported last Quarter on lower government outlays and a bigger depletion of inventories, capping a sluggish 1-H performance propped up mainly by consumer spending.
GDP (gross domestic product), the value of all goods and services produced, rose at a 1.1% annualized rate, down from an initial estimate of 1.2%, US Commerce Department figures showed Friday in Washington. Household spending, the biggest part of the economy, was revised higher on used-car sales.
“We are relying on a number that is not accurate,” said Mr. Feldstein said in a TV interview.
Mr. Feldstein, who served as US President Ronald Reagan’s chief economic adviser, explains that economists have not yet figured out a way to fine tune tracking new goods and services,.
“Most of the problems are in services, they do not have any way to calculate new products or services,” Mr. Feldstein said.
The US economy’s failure to develop a sustained pickup has helped keep the FOMC from pulling the trigger on an interest-rate hike this year.
Economists project a Q-3 rebound driven by household purchases and more stockpiling, and the report showed wages and salaries were revised higher, indicating consumers have the wherewithal to continue spending, should they choose to.
GOP Presidential nominee Donald Trump has been hammer home to voters the message that the economy can do better. Earlier this month, he blamed President Barack Hussein Obama and Democratic nominee Hillary Clinton for policies that produced “the weakest so-called recovery since the Great Depression.”
The real numbers prove that to be the truth, no matter what the Obama Admin’s spin and Hillary Clinton’s on the stump rhetoric
Have a terrific weekend