Property Advertisement - AMO Residence for sale!

Property Advertisement - AMO Residence for sale!
Click on the banner for more details.

Search This Blog

Thursday, November 30, 2023

US GDP growth is 5.2% for Q3 2023. Is it really that good?

Let's break up the GDP components for our analysis.

GDP growth=Government spendings+Investments+Consumptions+Net Exports

5.2% = 0.94% + 1.82% + 2.44% + (-0.04) = 5.16% (Rounded off to 5.2%)

As we can see from the GDP components, the 2 biggest contributors are Investments and consumptions.  The US consumers and firms are spending way beyond their means now and this can be reflected in the default and bankruptcy rates.

The US bankruptcy filings are at an elevated high in 2023.  Many US firms have overstretched themselves.

Thus, the latest US GDP growth may look good but it is seeding a bigger danger in the future because consumers and firms can't continue relying on debts for a long period.

No comments: