Before anyone starts crowing about GDP numbers, you need to realize just what comprises GDP. GDP=Consumption+Business Investment+Government Spending+Exports-Imports. That's the raw GDP score. Then you subtract core CPI to get the net. The thing that you have to realize are the changes that took place in the '90's when Boskin (Treasury) and Greenspan (Fed) changed the methodology by which CPI is calculated. Prior to 1994 it was a fixed basket of consumer goods the prices of which were added together and then averaged ARITHMETICALLY. They were then compared m/m and y/y to get the CPI increase or decrease. After 1994, the methodology was changed to allow substitution and hedonic weighting, and then GEOMETRICALLY averaging the resultant basket. This results in a much smaller number for the CPI. That smaller number is then subtracted from the raw GDP and makes GDP look larger than it really is. Bottom line, the books are being cooked. Don't even get me started on the unemployment Birth/Death modeling that understates actual unemployment. If you're at all interested in accurate figures on the economy, calculated before the Clinton Treasury and the Greenspan Fed started cooking them, go to
www.shadowstats.com. The site is run by John Williams, an economist who calculates things the old way, and it is a better reflection of what we are actually experiencing than the tripe you get from the BLS and BES.