Is The US Economy Really Growing?

Needless to say, something does not add up. The American people are deeply frustrated with how the economy is performing, but the government keeps giving us numbers that indicate that everything is just great...

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o they want us to believe that the U.S. economy grew at a very brisk pace during the fourth quarter of 2023 even though mass layoffs are happening all over America, sales of previously owned homes are at the lowest level in 28 years, homelessness is rising at the fastest pace ever recorded, and survey after survey is showing that most Americans are just barely scraping by from month to month. 

On Thursday, we were told that the U.S. economy grew at a 3.3 percent annualized rate during the fourth quarter of 2023. As per CNBC:

The economy grew at a much more rapid pace than expected while inflation eased in the final three months of 2023, as the U.S. easily skirted a recession that many forecasters had thought was inevitable, the Commerce Department reported Thursday.

Gross domestic product, a measure of all the goods and services produced, increased at a 3.3% annualized rate in the fourth quarter of 2023, according to data adjusted seasonally and for inflation.That compared with the Wall Street consensus estimate for a gain of 2% in the final three months of the year.

If that number reflected actual reality, it would be very good news. But how is it possible that layoffs were up 98 percent in 2023 while the U.S. economy was supposedly “growing” all year long? To me, it appears that something fishy is going on.

And that is precisely what we see when we take a deeper look at the numbers.  According to Zero Hedge, “GDP-boosting gimmicks” are being employed to make things look better than they actually are…

Turning to the all important consumption, we can’t help but smile when noticing that the BEA is again resorting to such favorite GDP-boosting gimmicks of the old Obama administration as spending on healthcare and… RVs! The two contributed to roughly half the growth in consumer spending in the fourth quarter.

Other numbers that don’t come from the Biden Administration tell a much different story.

For example, the Chicago Fed’s National Activity Index was negative in December, and it has been negative for 8 of the past 12 months:

Against expectations of a small rise from 0.03 to 0.06, The Chicago Fed’s National Activity Index (which draws on 85 economic indicators) tumbled to -0.15 in December. 2023 ends with 8 of the 12 months in negative territory…

So how in the world can the economy be “growing” if national economic activity was in negative territory for two-thirds of last year? It doesn’t make any sense at all.

And if the outlook for the future is positive, why are so many mass layoffs happening? Business Insider had already conducted one round of mass layoffs, but they just decided that another round has become necessary:

In the latest wave of layoffs to hit the digital media biz, Business Insider said it will cut 8% of its staff in a restructuring aimed at positioning the company for growth.

Business Insider CEO Barbara Peng announced the job cuts in a memo to staffers Thursday. “We have already begun to refocus teams and invest in areas that drive outsize value for our core audience. Unfortunately, this also means we need to scale back in some areas of our organization,” she wrote.

Back when it first started, Business Insider was actually quite good. But those days are long gone. Microsoft is another big name that is putting large numbers of workers on the chopping block…

Microsoft will lay off 1,900 employees at Activision Blizzard and Xbox, the latest tech company to announce cuts so far in 2024. The layoffs represent about an 8% cut of its video gaming staff of 22,000 workers and come months after Microsoft acquired Activision in a blockbuster deal. The $69 billion transaction in October represented one of the largest tech deals in history as Microsoft took over the studios behind bestselling games like Call of Duty, Diablo and Overwatch for its Xbox console.

And even though things are looking up for IBM these days, they are planning job cuts too:

IBM also said it will also cut a percentage of positions in the low single digits in 2024. The planned job cuts follow similar announcements in January by major tech companies, including Alphabet’s Google and Amazon.com. Chief financial officer James Kavanaugh said IBM will likely spend the same amount on restructuring as it did in 2023 – US$400 million – when it reduced its workforce by about 3,900 jobs.

Day after day, I share examples of very large companies that are conducting mass layoffs. Why would they be doing this if tremendous prosperity is ahead of us? It wouldn’t make any sense at all.

Of course the truth is that an economic downturn has already begun and it is going to get even deeper in 2024. Those on the bottom of the economic food chain are being hit the hardest.  Earlier today, I was saddened to read about homeless people in California that are being evicted from caves that they had dug into the banks of a river:

Rough sleepers in California were found living inside furnished caves dug into the banks of a river 20 feet below street level. The groups were removed from the eight caves – along the Tuolumne River in Modesto – over the weekend, and they were emptied of belongings, furniture and 7,600 lbs of rubbish, filling two trucks and a trailer. Some of the caves were decorated with murals, had broken floor tiles and one even had a makeshift fireplace with a chimney.

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There are countless others just like them all over the country. The Wall Street Journal has reported that homelessness was rising at the fastest pace ever recorded in 2023. But don’t worry about any of that.

According to Joe Biden and his minions, the U.S. economy is growing steadily and everything is just great. You believe them, don’t you? ✪