Socked by 6.4% Inflation, Record Trade Deficit, Inventory Shortages, and Drop in Government Spending, “Real” GDP Jumps Disappointingly | WHAT REALLY HAPPENED

Socked by 6.4% Inflation, Record Trade Deficit, Inventory Shortages, and Drop in Government Spending, “Real” GDP Jumps Disappointingly

Economists polled by the Wall Street Journal expected GDP to grow by an annualized rate of 9.1% in the second quarter, from the first quarter. Today the Bureau of Economic Analysis released its GDP estimate, and adjusted for inflation, it grew by an annualized rate of “only” 6.5% in Q2, from Q1, or not annualized by 1.6%.

This was still strong compared to the pre-pandemic years, but the high expectations got knocked down by spiking inflation that has surprised economists to the upside all year long, record trade deficits, sharp declines in inventories, and a drop in government consumption and investment.

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