GDP Smoke And Mirrors?

[chiburb]

Yesterday's news that GDP was reported at 2.4% created all kinds of positive headlines, many hailing the turnaround. While most stories mentioned a big increase in defense spending, they also failed to mention this:

"But here's an interesting factoid: the war in Iraq provided a one-time spike in defense spending (and therefore GDP) of about $40 billion, all of it deficit spending. Without the war, GDP would have increased by only $16 billion, an annualized rate of .67%. That's not so hot.

So, um, are we going to have another war this quarter to keep the numbers up?"

Not only is that "not so hot", it would be .83% below what was forecast.

Source here:
http://www.calpundit.com/archives/001798.html

[papau]

1. AP and Reuters did not carry that factoid - so the wire services are

not up to speed on Bush lies and the need for analysis of whatever partial truth the Whitehouse puts out (in the case of Reuters) or biased in favor of Bush and the GOP (as in the case of the AP)

[German-Lefty]

2. Aww, I don't know guys

"Gee, who to rely on for secondary economic analysis and prognostication, blogcasters, like General Glut, who have no direct economic stake in being right, or the folks at Fidelity, Putnam, Wellington etc. who do this for a living, and who's bonuses are predicated on being right? Decisions, decisions. Well, the S&P 500 is up 12.24% year to date, hmmmmm." -- Also from your link

Take one thing into consideration: there are millions of dollars poured into the financial news services. Traders pay top dollar to know the numbers as soon as they come out. I know; I happen to work with finacial news. Some of it becomes free after 15min, because it's old news by then. It's not like Chimpy and his buddies can fool these guys. Though maybe he can fool a few small investors, lenders, consumers, and imployers.