Matthew Yglesias » Income Down

Aug 29th, 2008 at 11:27 am

Income Down

Just as yesterday’s revision of the second quarter GDP numbers up to 3.3 percent growth was giving some signs of hope for the economy, along comes the news that “personal incomes fell by 0.7 percent in July, the biggest drop in nearly three years and a far larger decline than the 0.1 percent decrease analysts expected.” The economic analysts I talked to yesterday about the GDP numbers all said that the level of growth being indicated there was out of line with all kinds of other economic indicators in a way that gave them little confidence a genuine recovery was under way. This data seems to confirm that.

Comments
18

18 Responses to “Income Down”

spencer Says:
August 29th, 2008 at 11:39 am
Real personal consumption grew at a 1.7% rate in the second quarter.

With the July monthly data we are starting out the third quarter with real pce growth of -1.4%. Yes, it is only one months data but it says we are off to a bad start.
rapier Says:
August 29th, 2008 at 12:26 pm
The GDP number was a sham because it was measured against a claimed 1.2% inflation number. Simply put they have to deflate the GDP by the inflation number otherwise the GDP is measuring inflation. Which is exactly what they did.

Remember that the GDP number is given as at an annual rate. Inflation during Q2 has credibly be said to have been over 5%.
nukev Says:
August 29th, 2008 at 1:24 pm
Not really a stats wonk but I do know that here in central Wisconsin there are no jobs outside of healthcare. Hopefully, McCain will open up one of his ranches for lettuce production. $50 an hour sounds good.
Walker Says:
August 29th, 2008 at 2:36 pm
The GDP number was a sham because it was measured against a claimed 1.2% inflation number. Simply put they have to deflate the GDP by the inflation number otherwise the GDP is measuring inflation. Which is exactly what they did.

Even the CPI less food-and-energy (a number no one believes) was 3.5% the last three months. The fact that they used a 1.2% adjustment is just stunning. Who from Liberty University is running the BLS these days?
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Matt Yglesias

Income Down

18 Responses to “Income Down”

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