Real Gross Domestic Product (GDP) and Real Gross Domestic Income (GDI) 2022 Q4

Please consider the Gross Domestic Product (Third Estimate) for 2022 Q4.

• Real gross domestic product (GDP) increased at an annual rate of 2.6 percent in the fourth quarter of 2022.
• In the third quarter, real GDP increased 3.2 percent. 
• In the second estimate, the increase in real GDP was 2.7 percent. 
• The revision primarily reflected downward revisions to exports and consumer spending. Imports, which are a subtraction in the calculation of GDP, were revised down. 

Real GDP, Real Final Sales, Real GDI 

Real GDP, Real Final Sales, Real GDI 2022 Q4

Real GDP, Real Final Sales 

Chart Notes

• Real final sales are the true bottom line estimate of GDP. The rest is inventory adjustment that nets to zero over time.
• Real Final Private Domestic ignores government spending and exports. 

Real Final Private Domestic Sales was a big zero.

Significant Negative GDP Revisions Are Consistent With Recession

On January 26, I commented 4th Quarter 2022 GDP Is Much Weaker Than Headline Numbers

On February 24, 2023, I commented Significant Negative GDP Revisions for 2022 Q4 Are Consistent With Recession

Well, guess what. The BEA revised GDP lower again.

As I have commented many times, heading into recessions the revisions will tend to be heavily negative. Coming out of recessions, revisions tend to be positive.

Real GDI is Negative 1.1 Percent

Real GDP and real GDI are two measures of the same thing. 

The discrepancy is massive. Expect the discrepancy to resolve in the future towards lower GDP. 

Money Supply Is Headed for 6th Month of Contraction

In case you missed it, Money Supply Is Headed for 6th Month of Contraction

Money supply is shrinking at the fastest pace since the Great Depression. 

Well, that's OK. President Biden and all the economic cheerleaders say the economy is strong. 

MishTalk Video, What's the Real Risk Now, Is it Inflation or Deflation?

Given the obvious inflationary forces, that may seem like a silly question, but please consider this video discussion: What's the Real Risk Now, Is it Inflation or Deflation?

The short answer is Credit Freezes Are Highly Deflationary. See the above link for details and discussion.

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