GDP 'Nowhere Near' 4.3%: Rosenberg Dismisses Q3 Report As 'Fugazi,' Pegs Real Growth At 0.8%

While the U.S. Bureau of Economic Analysis (BEA) reported a robust 4.3% yearly summation successful third-quarter existent gross home merchandise (GDP) connected Tuesday, economist David Rosenberg is calling the header fig a “fugazi.”

The president of Rosenberg Research argues that underlying economical weakness is being masked by authorities spending and depleted savings, calculating “true” maturation astatine a meager 0.8%.

The authoritative BEA merchandise shows wide gains, with existent GDP accelerating from 3.8% successful the 2nd 4th to 4.3% successful the third. The summation was driven chiefly by user spending, exports, and authorities spending.

Don't Miss:

• This Jeff Bezos-backed startup volition let you to become a landlord successful conscionable 10 minutes, with minimum investments arsenic debased arsenic $100.

• Have $100k+ to invest? Charlie Munger says that's the toughest milestone — don't stall now. Get matched with a fiduciary advisor and support building

However, Rosenberg contends these figures are misleading. “If you deliberation the CPI information was manipulated, truthful was today's GDP report,” Rosenberg stated connected X.

He argues that erstwhile authorities spending, shifting import data, and a “sharp drawdown” successful the idiosyncratic savings complaint are stripped away, the system is hardly expanding. He specifically points to “flat idiosyncratic disposable income growth” arsenic a captious reddish emblem contradicting the evident depletion boom.

If you deliberation the CPI information was manipulated, truthful was today's GDP report. Strip retired government, sliding imports and the crisp drawdown successful the idiosyncratic savings complaint successful enactment of depletion (in the look of level idiosyncratic disposable income growth), and conjecture what? Real GDP maturation was…

Trending: Americans With a Financial Plan Can 4X Their Wealth — Get Your Personalized Plan from a CFP Pro

The study has sparked fierce statement among analysts interpreting the aforesaid information done vastly antithetic lenses. While Rosenberg sees a hollow system propped up by unsustainable spending, Gordon Johnson of GLJ Research sees a terrifying nominal boom.

Johnson highlights that nominal GDP (growth earlier adjusting for inflation) surged 8.2%, accompanied by a GDP terms scale speechmaking of 3.8%—far hotter than the Fed’s target.

“Nominal maturation successful the U.S. is >8%… yet 10yr yields are AT JUST 4.17%?” Johnson questioned, arguing that the Federal Reserve's existent easing rhythm is “encouraging EVEN MORE inflation” successful an system that is overheating, not cooling.

So… nominal maturation successful the U.S. is >8%, the GDP terms scale conscionable came successful astatine 3.8% (WAY supra ests.), yet 10yr yields are astatine JUST 4.17%? History suggests w/ nominal maturation astatine >8%, 10yr yields should beryllium WAY higher. And, yet, the Fed is doing QE & cutting rates, encouraging EVEN… pic.twitter.com/s38RNWm81Z