Q1 GDP was only 0.1% in the United States. In that number is
something called Nominal GDP, which is Real GDP plus inflation. Nominal
GDP was reported by the government as 1.4%, which means that inflation
in Q1 was running at a 1.3% annualized rate.
Energy prices were up 3.3% year-over-year. Food prices as measured by protein, which is meat, poultry, fish, and eggs, were up 6.4% year-over-year. Health care costs were up 9.9% in the past year. That’s the largest increase in health care costs in 30 years. The cost of living has skyrocketed in the past year for anyone eating proteins, or anyone who was paying for health care and energy. So taking a real inflation measure off the Nominal GDP print, you can clearly see that the U.S. economy is contracting right now.
The reason we are in a further period of contraction is the government never allowed the economy to heal. Instead, the Fed used quantitative easing to inflate real estate prices and stock prices. This has served to destroy the American middle class. This also increased the wealth gap.
As proof of how badly the economy in the United States is struggling, look at the retail sales numbers that came out this week. The following companies that cater to the middle class reported vastly disappointing earnings: Target, Home Depot, Walmart, Lowe's, Dick’s Sporting Goods, PetSmart, Urban Outfitters, Staples, and Sears. You cannot grow an economy in aggregate if you do not have a healthy middle class.
This is why the U.S. economy will never get healthy until we actually allow the middle class to have real wage increases. This also means the Fed would have to allow inflation to fall. But they won't do that, they have essentially signed our economy's death warrant.
Energy prices were up 3.3% year-over-year. Food prices as measured by protein, which is meat, poultry, fish, and eggs, were up 6.4% year-over-year. Health care costs were up 9.9% in the past year. That’s the largest increase in health care costs in 30 years. The cost of living has skyrocketed in the past year for anyone eating proteins, or anyone who was paying for health care and energy. So taking a real inflation measure off the Nominal GDP print, you can clearly see that the U.S. economy is contracting right now.
The reason we are in a further period of contraction is the government never allowed the economy to heal. Instead, the Fed used quantitative easing to inflate real estate prices and stock prices. This has served to destroy the American middle class. This also increased the wealth gap.
As proof of how badly the economy in the United States is struggling, look at the retail sales numbers that came out this week. The following companies that cater to the middle class reported vastly disappointing earnings: Target, Home Depot, Walmart, Lowe's, Dick’s Sporting Goods, PetSmart, Urban Outfitters, Staples, and Sears. You cannot grow an economy in aggregate if you do not have a healthy middle class.
This is why the U.S. economy will never get healthy until we actually allow the middle class to have real wage increases. This also means the Fed would have to allow inflation to fall. But they won't do that, they have essentially signed our economy's death warrant.
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