Four percent growth in GDP is wonderful news. But, wait a minute! Shouldn't we be also looking at the internals of the data and not just the headlines? Yes, of course, but then again who wants to be depressed with the truth? I know, go ahead and call me "Mr. Kill Joy!"
Now for the truth, which is always in the details. Over the past year, GDP rose by $675 billion. However, 52%, or $351 billion, was due to nothing else but increase inventory stuffing at businesses in anticipation that it will be sold. (See, if you increase the stock of inventory, GDP automatically rises.) Well, good luck with that business mindset. I don't see that the consumer is financially able to take all the inventory off the shelves.
No comments:
Post a Comment