FINALLY, THE TRUTH: Recession Since 2022: US Economic Income and Output Have Fallen Overall for Four Years.

The phenomenon of undercounting inflation is particularly concerning today given how high the official inflation measurements have been for the last several years. The inflation itself has increased the nominal values of several key economic metrics without resulting in any real change. This is why there has been such a disparity between the rapid rise in nominal, pre-inflation GDP and the relatively slow increase in real, after-inflation GDP.8

The following data are presented in such a way as to show the reader the change in nominal and real values through the second quarter of 2024, beginning in either the first quarter of 2019 or January 2019, when applicable.

Note that not only are the inflation adjustments large, but they are highly variable, ranging from under 20% for wholesale sales to 22% to 23% for manufacturing inventories and new orders.

While 3% may seem like a small difference, in the context of GDP growth it represents nearly a $1 trillion difference in real output – roughly the GDP of Saudi Arabia. And in the context of annual economic growth, 3% over a 4-year period is a very large number – the difference between robust and anemic growth. Or between anemic growth and recession.

Plus: “On a per capita basis, the results are worse because the population has increased approximately 2.1 percent from the first quarter of 2019 through the second quarter of 2024. During that period, nominal GDP per capita increased $22,182, or 34.7 percent. Real GDP increased $7,038 in chained 2017 dollars, or 11.4 percent. Adjusted real GDP fell $1,540, or 2.5 percent.”

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