by Karl Denninger
Market-Ticker.org
The insanity coming out of “financial media” on the GDP report is amusing — but not surprising.
Real gross domestic product (GDP) increased at an annual rate of 1.6 percent in the first quarter of 2024 (table 1), according to the “advance” estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2023, real GDP increased 3.4 percent.
Here’s the basic problem in this report — the last three reports are a declining trend and the Q3 2023 number looks like a pull-forward rather than an acceleration in growth, as the overall trend from Q3 2022 looks like those two interim reports were people having “one last party.”
The increase in consumer spending reflected an increase in services that was partly offset by a decrease in goods. Within services, the increase primarily reflected increases in health care as well as financial services and insurance.
Health care and insurance are not discretionary purchases and this is extremely bad news economically as it wasn’t absorbed; it came out of everything else.
Oh, and as for inflation?