Decline in Purchasing Power
One thing about the blogs I read, they always dig into the numbers in a way that you just don't get or incredibly rarely get in the news.
So, looking at Market Ticker's number crunching that over some nice looking GDP numbers:
Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 3.5 percent in the third quarter of 2009, (that is, from the second quarter to the third quarter), according to the "advance" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP decreased 0.7 percent.
Well, when he digs the one he found that was shockingly bad is:
Disposable personal income decreased $20.4 billion (0.7 percent) in the third quarter, in contrast to an increase of $138.2 billion (5.2 percent) in the second. Real disposable personal income decreased 3.4 percent, in contrast to an increase of 3.8 percent.
That's worse. A lot worse. Disposable personal income decreased in nominal terms q/o/q by 5.9% while in real terms (inflation adjusted) it decreased q/o/q by 7.4%! That is an enormous swing in purchasing power and not in the right direction!
No question in my mind, the people are the backbone of the economy and that's an enormous reduction in buying power.
Overall the digging into the number is very good here. I like that Karl looks at the reports of companies that you would have to see improvements in, ie homebuilders and their suppliers, to support the numbers being put out and he says there is zero evidence that what the report says is happening is supported by the companies it is about.