I did want to follow up on my post about preliminary 1st quarter 2007 Real GDP which the Commerce Department reported as 1.3% before the open last Friday. To answer my question, “Does The Economy Matter?”, the answer, at least on Friday, was: NO – as the Dow rallied 15 points in the face of that ugly number.
Scroll down to Table 1 (page 5 of 13) and you can get the nuts of the report:
Consumption Expenditures: +3.8% (from the 4th quarter)
Private Investment: -6.5%
– Non Residential Investment: +2.0%
– Residential Investment (mainly housing): -17.0%
Essentially what this says is that housing is really bad, business investment is tepid and consumer spending is strong.
I wrote “Or Not So Real” because I’m a believer, along with others, that government inflation numbers substantially understate actual inflation. I mean: how is it that money supply growth always exceeds inflation growth when money supply growth IS inflation?
It makes me wonder: Are we in a recession right now?