The above chart simply shows last quarter GDP growth rate and the component parts of the GDP equation that contributed to growth. PCEs were strong as was gross private domestic investment. Also consider that inventory adjustments subtracted a full percentage point from the above total; had that number printed a "0" we would have seen growth of 3.5%.
3 comments:
Half of the increase in PCE comes from increased spending on gasoline ($94B more than a year ago), health care ($84B more), food ($50B more),and utilities ($38B). Shouldn't we be concerned about these increases rather than celebrating them as a positive sign of a healthy economy?
It depends why they increased. Was it because of inflated prices or more overall activity? I think that would play into the answer you're looking for.
IL JimP -
Your question is good but impossible to answer, and there's the rub. Anon's info doesn't provide insight so much as expose just how overrated GDP is. It's a data point and an essential one for analyzing the state of the economy, but it has nothing to do with standard of living.
You're really asking if this increase in economic activity is making people happier. I see no evidence of that, but the scope of this question is outside economics. Economics is about resource distribution, and this blog is about data.
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