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The government released the latest GDP report
and real GDP, for the fourth quarter of 2013
was up a respectable 3.3 percent. That's the second quarter in a row of
substantial growth in GDP. However, there are several reasons
in the data to be suspicious about GDP growth
and economic growth, more generally, going forward.
First of all, spending
on capitol and investment was up only 3.8 percent, which is considered weak.
And the personal savings rate was little over 4 percent,
which is, again, considered historically very low.
An Austrian economist place a lot of impact on
savings and investment as the drivers of economic growth.
Also, increases in food spending
accounted for 20 percent- almost 20 percent
of the growth in GDP. We've got to be very suspicious of that
especially considering the GDP deflator used in this report was only 1.3 percent.
Most people are experiencing greater price inflation
than 1.3 percent, so again we've got to be
curious and dubious about those statistics.
And also inventories increased at the fastest pace
in record history, in the fourth quarter of 2013.
So that means there's more goods on the shelves
of stores and a less of a need to produce goods
in the factories. So, again
3.3 percent is respectable economic growth,
but there are several reasons to be dubious about that growth
and economic progress moving forward. And that's The Mises View.