GDP First Release - Stagflation
 

This release does not include the effects of actual tariffs, but more reflects the chaos and confusion /uncertainty around the size, purpose and impact of impending tariffs.

Inflation deflator higher than expected, so next step is recession, barring no changes in policies. Most trade policies take quarters to come to an executable agreement.

So backward accounting looks are a deteriorating economy, and the Fed will not try to save the economy right away, and treasury bonds may become more risky to hold, so interest rates may rise more than expected.

Holding Treasuries, the question for why the bonds will move:
1 - inflation higher? = bonds down/rates up
2 - recession? = bonds up/rates down
3 - US Dollar down? = bonds down / rates up

good luck to us!

Why would the Fed lower rates when inflation is worse than ever? We going to give money away for free, (crazy low interest rates), and expect inflation to improve?

AI Overview:

A GDP deflator higher than expected means that the prices of goods and services included in Gross Domestic Product are rising faster than anticipated. This indicates a higher rate of inflation than what was projected, potentially impacting economic growth and stability.

How will this NOT devolve to politics. Bait post.

If you have been following the financial/investment threads, you may be aware these updates are often posted without conflict.

Where did you read that inflation is worse than ever? The last report I saw said it was a little below expectations at 2.4%. Sure, 2.0% would be nice and it might go up in the next report but by no means is 2.4% "worse than ever."

Good to hear prices you're paying stabilized and nothing has gone up in the past few years and continuing. We see constant increases in pricing, constant.. taxes, repairs, food, medical, insurance, utilities, phone bills, internet services, the list is endless. But good on you.

This is a discussion on economics. Does not need to become political.

C&S................you have out done yourself on click-bait, should get the anxious fired up.

:22yikes:

So you don’t understand what inflation means.

Yes, things have increased, two years ago almost 4%, last year about 2.5%, and this year it’s too soon to tell. Prices have gone up and that is called inflation.

Yes, prices have gone up constantly and that is normal. The last two years that prices did not increase were 2015 and 2009. Both those years followed significant economic problems in the US. We don’t want another recession with negative inflation.

People have different ideas of what “high” inflation is. Above 5% is certainly high, some would say above 3%, and still others would say anything above 0% is too much. A common target for a healthy US economy is 2%. Last year’s 2.5% was pretty good and last month’s 2.4% was a little better.

Inflation so far this year is not greater than ever, not even close. Prices increased last year but so did the SS COLA and so did the stock market. Some items increased far more than inflation and those need to be looked at but they are the exception, not the rule.

I am very hopeful give this some time.

:highfive:

A lot of Shock & Awe and emotion.

We are in strange territory and the "pro's" are trying to predict and fill airtime on shows.

Market Timing???

Have fundamentals changed???

:posting:

The GDP calculation includes the trade deficit which was even larger than normal.

I noticed that the S&P closed higher today after this news.

Please, I don't understand what inflation means? Oh boy, I'm about to hear a fairy tale about inflation. Painting pretty pictures about how we should all be thriving in the price increases we have endured recently is ridiculous.

The SS COLA increase addressed little of actual increases in the cost of living for seniors and the stock market is a rocky, old boat with a small cork plugging the hole in it's problems. I sure wish I had some of that elixir to get the same skewed perspective.

Bureau of Labor Statistics:
Since 2020, US inflation has seen a significant increase, peaking in 2022 and then declining in 2023. The inflation rate in 2020 was 1.23%, increasing to 4.70% in 2021 and 8.00% in 2022. In 2023, it decreased to 4.12%. As of March 2025, the Consumer Price Index (CPI) for all items rose by 2.4% over the last 12 months,

This is not the first nor the last downturn in the market.

Nobody can consistently time the market. If they say they can and want to handle your funds all I can say is run forrest run.

Once went to a financial seminar and the guy running it was looking to manage others funds was a former math teacher which he only admitted when I asked him for his background.

Asked him how he times the market and he told me of this wonderful computer program he owns that does it for him and his clients.

When I looked at him like he had two heads he would not look at me for the rest of his presentation. Will say the food was good.

Great, you found the same data I did though I prefer the table view found on other pages.

What I don’t see there is your point. Yes, inflation was high in 2022. Today is not 2022 and today inflation is not high. Comparisons to 2020 are as valid as comparisons to 2009 and 2015 - there is a reason why inflation was low and it is not something we should desire to repeat.

Good, you can see how high inflation has injured people's income and standard of living and that we not "just 2.4%" above 2020 cost of living. We are at a very high level of inflation and I'm happy you can see it.

How can you not see that we are NOT/NOT at a high level of inflation?! You yourself stated inflation is running at 2.4% now (though you conveniently neglected to mention 2.5% in 2024).

And no, nothing you presented spoke to people’s income and standard of living. Income has gone up, standard of living is more difficult to capture.

Value of $1 from 2020 to 2025
$1 in 2020 is equivalent in purchasing power to about $1.24 today, an increase of $0.24 over 5 years.

The dollar had an average inflation rate of 4.32% per year between 2020 and today, producing a cumulative price increase of 23.56%.

I don't see how people are living in an area where they don't see this increase. You're just one of the lucky ones I guess.

Stay tuned. Impact of tariffs has not worked its way through yet.

Unbelievable what people say. Highest inflation occurring today?? Is this April 1st again?
Prices are down compared to last year and way down compared to 2022. How much was gas in 2022 compared to today?
Market is down, no big deal! It’s not because of inflation. We will see a huge jump in equities later sometime this year. To make things right, it’s going to take some time. If you would have bought some stocks in the last month (I have bought 6 battered stocks in the tech area a month ago), there have been big gains. It’s still too early to get all the way back in IMO.

Good to hear your hearing is so good that you heard something not stated in the post to which you replied.

Inflation is not worse than ever. Fact. The post is accurate. Prices do not come down when inflation drops. Pricing rise more slowly. Increased prices are a result of inflation in the past few years - not inflation today.

Congrats on disputing your own post with facts. Higher prices are not a result of today’s inflation rate. Thanks for clarifying.

You really don’t know the difference between inflation and prices, huh? Today’s higher prices are a result of yesterday’s higher inflation rate - not today’s inflation rate.

Come on, man!

Hard to turn a 48-month economy around in 100 days.

If we returned to golf standard and got rid of fiat money, no Fed required nor would there be inflation discussions. Both parties suckered Americans. No politics intended.

Core GDP is +3%, look it up. Gross domestic investment is up 22%. Exports are up 1.8%. Parroting what's in the headlines is not financial talk. There are zero events in history where we have had a recession with rising core GDP.

Your ignoring the size of the National debt and the possible effect on solvency and the use of the dollar as a reserve currency. The growth in GDP has also been overstated in the previous years due to large government spending and hiring. In most cases government jobs do not equate to more "product" being produced.

Egg prices are down 83% and gas is $1.99 gal. Heard it yesterday.

Lot of Assumptions in there, and obviously with a biased point of view. Economists aren't so smart, are you one of them?

In the 48 months you are referring to, the U.S. had added 16 million jobs, unemployment was at its lowest rate in 50 years, real wages for the bottom 80% of Americans were increasing, and inflation levels had come down almost to the Federal Reserve’s target from their highs during the post-shutdown shocks.

In the 48 months that somebody was referring too, it was all fake. Every month for the last year they had to correct their o er reaching jobs stats because they wanted to make things look better for November. Also, most job creation was in government which is wasted jobs not productive jobs. Remember the 80k irs workers that the government was hiring? I would make them all ice agents or fire them.

As for wage growth, it was all due to the foolishness of raising the minimum wage to $20 hr, so now your McDonald’s happy meal is $20 in California instead of the old $5. Everybody had to raise their cost of living and the cost of goods because of this so the $20 hr employee is still making poverty wages. Everything went up to coincide with the salary increases. The only people that suffered are the old folks on social security/fixed income. If I was still working making hundreds of thousands $$$, I would ask for an equivalent wage increase too, cost of goods was going up for me too. It’s a never ending spiral that people don’t understand. People that demand high minimum wages will pay more for all the goods so the financial situation will not change. They need to get a better job!

People do not realize that minimum wage is for entry level jobs or jobs that require little or no skill not something that becomes a career. Ambition is a good thing.

Instead of paying $ 20 employers will look to replace these employees via automation.

The Govt always revises the economic stats when new data is incorporated.
Job creation was NOT due to Govt hiring.
Additional IRS auditors bring in more Govt revenue than they cost.
Wage growth is NOT just because of a $20 minimum wage. In Florida the minimum wage is $14 and it’s less in most states. Less than 2% of American workers make minimum wage.

Is that where the dollar is backed by Srixon? Ping?

Maybe, but pure fabrication of the initial data is not standard practice.

Umm, yes it was. Almost ALL of the new jobs were in the public sector.

Right. Inflation was also involved.

IRS Enforcement Spending Has Not Reduced the Deficit - EPIC for America

From the link:
"This means that every $1 of new revenue collected from the IRA’s enhanced enforcement efforts cost taxpayers $1.04."

LIV

:pepper2:

Pure fabrication of the data? Easy to say with no proof.
Of the 16.6 million new jobs created during the last 4 years, 1.4 million were Govt jobs. Look it up.
The original comment was that wage growth was due to a $20 per hour minimum wage. That comment was wrong.

And here’s a study that shows otherwise:

The paper, “A Welfare Analysis of Tax Audits Across the Income Distributed,” published in June, is based on an analysis of about 710,000 in-person audits of individuals from 2010 to 2014. The researchers found that an additional $1 spent on audits of top earners (taxpayers above the 90th income percentile) brings in over $12 in revenue.

In addition, there is increased revenue that comes indirectly, as higher income taxpayers are less aggressive with their tax returns when they know they’ll likely be audited. This is harder to measure.

Audits from 2010 to 2014...that's a stretch. How about something a little more current?