The Message In The Q1 GDP Shock: Massive Windfalls For The 1%; Hardly 1% Growth For The Masses

David Stockman reports:

The Q1 GDP print at -2.9% was the fourth lowest (out of 120 quarters) since Ronald Reagan declared “morning in America” in early 1984. But the true results were probably far worse—unless you believe that the annual rate of inflation this past winter was an anemic 1.27% per the BEA’s deflator for GDP. Even the medicated CPI-U index clocked in at 1.8% during Q1 and is now running north of 2%. Likewise, food was up at a 2.1% annualized rate during Q1, rents and medical care were each up at a 3% rate, and consumer energy prices were rising at a 5% annualized rate.

So based on actual inflation, the Q1 GDP number was negative 3-5% at best. Moreover, if you use a non-governmental measure of inflation, such as the Billion Prices Project (BPP), the picture is even more foreboding. As the Consumer Metric Institute noted, based on the BPP inflation of 3.91% in Q1, real GDP would have clocked in at a deep, recessionary -5.6%.

No word yet on whether Eric Holder will blame everything on consumers being racist.