It all comes down to credibility and computation…

(1)  The same regime officials who have manipulated intelligence, law enforcement, and healthcare agencies to advance their progressive communist democrat agenda control the agencies that produce the nation's economic outlook.

(2)  If you read the footnotes, the media is reporting "preliminary" results, which will be corrected over succeeding months.

GDP Is Revised Higher. There’s No Recession Just Yet.

Gross domestic product rose at a 2.9% annual rate in the third quarter after falling in the first two quarters of 2022, a stronger-than-expected performance that eases fears about an imminent recession.

The 2.9% growth in the third quarter was revised up from the first estimate of an increase of 2.6% issued last month by the Bureau of Economic Analysis. Economists had expected the revised number to remain at 2.6%, according to FactSet. Experts forecast the economy will grow again the fourth quarter, with the Federal Reserve Bank of Atlanta expecting an expansion of 4.3%.<Source>

(3)  It is relatively easy to manipulate the numbers once you know how the GDP is computed.

The most common method of estimating the GDP is called the expenditure approach and is based on the money spent by various groups that participate in the economy.

GDP = C + G + I + NX

C = consumption or all private consumer spending within a country’s economy, including, durable goods (items with a lifespan greater than three years), non-durable goods (food & clothing), and services.

[OCS: Consumers still have a lot of money on hand as the global pandemic and the reduced availability of goods and services forced savings and curtailed buying. Now, with inflation looming large, some are spending now to avoid future price increases.]

G = total government expenditures, including salaries of government employees, road construction/repair, public schools, and military expenditure.

[OCS:  The profligate government spending and the Federal Reserve inflation of the U.S. currency can easily influence the total value of the GDP. More and more billions continue to be spent on paying Ukraine's government workers' pensions.]

I = sum of a country’s investments spent on capital equipment, inventories, and housing.

[OCS: Corporations are over-ordering inventory to compensate for anticipated supply chain problems and rising prices due to inflation.]

NX = net exports or a country’s total exports less total imports.

[OCS:  This is the biggest driver of the purported increase. While our currency has been inflated, the dollar, relative to other major currencies, has been doing better as more foreign asset managers have greater faith in the economic outlook in the United States than their own countries. Because of various problems in the European and Asian Markets, foreign entities are purchasing larger amounts of our exports while American imports have been deeply affected by supply chain problems.]

(4)  On a cautionary note, the Biden Administration is pushing for increased government spending. It is widely anticipated that the GOP will greenlight the effort while claiming they reduced the Democrat spending number. They won't admit that the number was inflated to give the GOP a propaganda win when they agreed to the Democrat's original target number.

Will the Federal Reserve pussy-out at their next meeting?

There is no doubt in my mind that the Federal Reserve should raise the rates by 75 basis points to help bring inflation under control quickly. However, it appears that various former Fed officials are advocating a 25- to 50-basis point increase to satisfy Wall Street and the corrupt Biden Administration looking for a propaganda win. Look for the pain continuing.

Are your retirement investments about to be pissed away on "woke" causes run by virtue-signaling social justice warriors?

The Biden Administration's Department of Labor has quietly announced a final rule before Thanksgiving that allows employers to pour workers' 401(k) funds into investments that support woke causes that promote climate change and diversity.

The rule reverses a Trump-era mandate that a fiduciary must choose investments based solely on participants' best financial interests, including a restriction blocking employers from using an ESG fund as a default option for workers automatically enrolled in 401(k) plans.

Now, asset managers and retirement plan administrators can consider environmental, social, and corporate governance (ESG) factors when selecting investments – even if such selections might eventually damage the participant's return on investment.

Bottom line…

Ironically, the big financial institutions always point to their cherry-picked historical results. At the same time, SEC Rule 156 requires financial firms to tell investors not to base their expectations of future results on past performance before they invest.

Most green energy investments are scams dependent on government subsidies and mandated use to overcome their inability to generate a return on investment without government support. Remember former President Barack Obama's praise of Solyndra before it filed for bankruptcy and used government guarantees to cover significant investor losses.

We continue to be screwed by the fine print.

-- Steve

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