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New Gross Output and B2B Data Confirm Economic Slowdown, But No Recession
2015 May 17, 7:17am 2,849 views 2 comments
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1
Strategist
2015 May 17, 7:31am
Strategist
2015 May 17, 7:31am
New Gross Output and B2B Data Confirm Economic Slowdown, But No Recession
This has go to be the slowest recovery ever. You can't even call it a recovery.
We need a new "word" to describe this. How about "Dead Recovery"
2
indigenous
2015 May 17, 7:40am
indigenous
2015 May 17, 7:40am
More like the recovery that ain't. This is what happens when you put Keynesians in charge of something that needs to be left to adults.
He is actually showing that the economy is not going into another recession. But that data shows the last qtr of 14, I guess because it takes the BEA a while to gather the data. The article is dated 5/15
Washington, DC (Thursday, April 23, 2015): Gross Output, a broader measure of U. S. economic activity published by the Bureau of Economic Analysis, grew much more slowly in the 4th quarter of 2014, confirming a slowdown in the economy into 2015. According to today's BEA release, real GO advanced at an annualized rate of only 2.6% to $31.4 trillion by the end of 2014, half the rate of the 5.2% jump in the 3rd quarter.
Gross Output (GO) is a measure of sales or receipts of all industries throughout the production process, including business to business transactions (B2B). Most B2B activity is left out of GDP statistics.
Since the financial crisis of 2008-09, GO has risen faster than GDP, and that continued to be the case in the 4th quarter. GO advanced at a slightly faster pace than GDP. Gross Domestic Product (GDP), which measures the value of final goods and services only, rose 2.2% in real terms to $17.7 trillion in the fourth quarter. The fact that GO is still growing faster than GDP suggests that the economic recovery is still in place, and a recession is unlikely.
Business Spending (B2B) Slows
B2B activity also continued to slow into 2015. According to the new Skousen B2B Index, business spending increased at a lower annualized rate (2.5%) compared to the 3rd quarter. See the chart below.
"The GO data and my own B2B Index demonstrate that total US economic activity has slowed significantly, but not enough to cause an actual recession,†stated Mark Skousen, editor of Forecasts & Strategies and a Presidential Fellow at Chapman University. "B2B spending is in fact a pretty good indicator of where the economy is headed, since it measures spending in the entire supply chain.â€
Skousen champions Gross Output as a more comprehensive measure of economic activity. "GDP leaves out a big part of the economy, business to business transactions in the production of intermediate inputs,†he notes. "GO includes most B2B activity that is vital to the production process.â€
http://mskousen.com/category/gross-output/