Inflation “to blame” for high Q4 GDP

Floyd

Norris unpacks the Q4 GDP numbers in the NYT, and concludes that

Lower inflation and improved exports made a mediocre quarter appear much

better than it was.

Nouriel Roubini

has much the same conclusion, but cites consumer spending as the main factor

keeping GDP figures afloat. Barry

Ritholtz splits the difference, saying that yes, consumer spending was high

at 4.4%, but that was mainly because of low – in fact, negative –

inflation, with nominal spending rising a pretty mediocre 3.6%.

In every quarter, of course, some GDP components are healthier than others.

But it is a bit weird to find so much ink spilled on worrying about how low

inflation is!

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One Response to Inflation “to blame” for high Q4 GDP

  1. wcw says:

    Who’s worried? The point is that the headline was a bit distorted. Me, I was much enheartened by the durables PCE, which came in nice again for a quarter after three of four previous had been on the weak side. When consumers are buying big-ticket durables, they’re consuming.

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