March Was The Worst Month For U.S. Economy Since The 2008 Recession
by Dave Kranzler, Investment Research Dynamics
The broadest gauge of U.S. economic output, from the Commerce Department, tracks the economy on a quarterly basis. The private forecasting firm Macroeconomic Advisers provides a measure to track gross domestic product on a monthly basis…Macroeconomic Advisers on Thursday said its monthly estimate showed GDP fell an inflation-adjusted 1% in March, the largest drop since December 2008. – Wall St Journal – LINK
(click to enlarge)
The Kool-aid drinking Keynesian economists are attributing the poor GDP report for Q1 to a drop in exports. That’s an absurd notion, of course. Especially if we were to re-adjust the GDP estimate with a true GDP-price deflator (inflation measure). These guys always have some excuse, whether its the weather or the port strike on the west coast.
How about just the simple fact that the overleveraged, underemployed American middle class has finally hit a wall in its ability to consume beyond everyday necessities?
Yes, exports were down in Q1, but I guess that has nothing to do with the fact that the entire global economy is in the throws of an economic collapse. Real imports of goods and services were estimated to be up 1.8% in Q1 vs. 10.4% increase in Q4 2014. In other words, exports declined but the rate of imports slowed considerably.
About those retail sales (click to enlarge, source: Bloomberg):
This graph shows the monthly % change (left axis) and year over year % change (right axis, red line) in total retail sales. As you can see from the blue line, there’s been a decleration in year over year retail sales since May 2013. So much for the “polar vortex” fairytale. Retail sales have been slowing down starting six months before (July 2013) the polar vortex allegedly affected the ability of consumers to use their credit cards in a manner which pleases the Keynesian central planners. The red line shows us that the deceleration in retail sales growth accelerated in October 2014. This includes three months in a row (red box) of negative monthly retail sales.