Thursday, April 30, 2009

More on 1Q GDP



Click for a larger image

The above chart shows what contributed to the -6.1% inflation adjusted decrease in GDP last quarter. This chart tells us some very important information.

1.) Practically everything fell apart last quarter.

2.) Remember -- exports and imports are a netted item. I separated them to make this point:


Netted exports has been dropping like a stone over the last two quarters because



Imports have dropped by $802 billion since 2Q2008 and exports have dropped $432.2 billion. Because imports are dropping faster than exports GDP is "technically" increasing -- or more specifically subtracting less from GDP. However that drop indicates US demand is dropping which is a bad economic development.