Authored by David Stockman via The Brownstone Institute,

Yes, we have some stagflation. Subsequent to the pre-Covid peak in Q4 2019, real final sales of domestic product have slowed to a crawl, rising by just 0.73% per annum during the last 2.5 years.

We much prefer this measure over real GDP because it removes the abrupt inventory swings from quarter to quarter, which can have out-sized impacts on the headline number. Thus, during the first two quarters of 2022 the reported back-to-back real GDP contraction was owing to inventory liquidation, not an actual shrinkage of current activity.

As it happens, however, inventory swings cut both ways – so the chart below removes this statistical noise and gets to the underlying trend of production, income and spending.

What has happened, therefore, is that despite upwards of $11 trillion of monetary and fiscal

Keep reading this article on Zero Hedge - Blog.

Leave a Reply