And I am amused that so view people call it a DEPRESSION.
(Not only) Real unemployment numbers are at depression levels.
This is the Greatest Depression.
– US In Recession Right Here, Right Now (Global Economic Analysis, August 29, 2011):
I am amused by those who think a US recession will come within a year. Even more amusing are those who think a recession will not come at all.
The US is in a recession now. I am not the only one who thinks so.
Last Friday, I received an email from Rick Davis at Consumer Metrics, complete with an Excel spreadsheet that shows that had the GDP deflator been based on the consumer price index (CPI) rather than the BEA’s measure of price inflation, the US would already be in the second quarter of contraction.
My friend Tim Wallace noted Davis’ explanation would be consistent with Petroleum Distillates Demand Shows “Definite Economic Downturn Starting April/May 2011”.
Thus Wallace was not surprised at all.
In the meantime, I received a set of emails from Doug Short. He had already charted what I was about to graph. Let’s take a look.
The Deflator Makes Big a Difference
Please consider Will the “Real” GDP Please Stand Up? by Doug Short.
How do you get from Nominal GDP to Real GDP? You subtract inflation. The Bureau of Economic Analysis (BEA) uses its own GDP deflator for this purpose, which is somewhat different from the BEA’s deflator for Personal Consumption Expenditures and quite a bit different from the better-known Bureau of Labor Statistics’ inflation gauge, the Consumer Price Index.
I’ve updated my charts showing quarterly Real GDP since 1960 with the official and three variant adjustment techniques. The first chart is the official series as calculated by the BEA with the GDP deflator. The second starts with nominal GDP and adjusts using the PCE Deflator, which is also a product of the BEA. The third adjusts nominal GDP with the BLS (Bureau of Labor Statistics) Consumer Price Index for Urban Consumers (CPI-U, or as I prefer, just CPI). The forth chart, a recent addition prompted by several requests, adjusts nominal GDP using the Alternate CPI published by economist John Williams at shadowstats.com
The following charts are courtesy of from Doug Short.
Read moreUS In Recession Right Here, Right Now! (Charts)