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Is the US Economic Activity Really a Lot Lower than It Seems?
Lavorgna (SMBC Nikko) and Millar (Barclays) say look to GDI for a better estimate of economic activity. Both argue that GDI might better signal an incipient recession (USAToday): chart Figure 1: GDP (bold black), GDO (bold light blue), GDP+ (red), GDI (blue), all in bn.Ch.2017$ SAAR. GDP+ level uses GDP+ growth rates iterated on 2019Q4 GDP. Source: BEA 2023Q3 2nd release, Philadelphia Fed, and author’s calculations. GDI is indeed far below GDP (Zerohedge asserts that GDP will be revised down toward GDI). It’s true that GDI has shrunk by 0.2% y/y; on the other hand, q/q annualized growth was +1.5%. In any case, ... (full story)