Americans are questioning all sorts of government functions these days.
For example, the majority of people, according to polls, have doubts as to whether U.S. elections are free and fair.
Some believe the federal justice system has been weaponized and used against those in political opposition.
As of two weeks ago, a whole new group of people is wondering if the vaunted Secret Service can be trusted to protect the Republican candidate for president.
As long as people are questioning the credibility or motivations of government officials, they should remember to be skeptical of official economic data as well.
The U.S. Bureau of Economic Analysis (BEA) published the latest quarterly report on GDP Friday. It was a surprise. U.S. economic growth was much stronger than expected. The data showed growth at a healthy 2.8%, better than the 1.9% rate expected by economists and double the 1.4% growth reported in the first quarter.
Combine that with a couple of key data points from the Bureau of Labor Statistics (BLS), and the picture being painted of the U.S. economy is rosy indeed.
We’re told roughly a quarter million new jobs were created each month over the past few years, and the unemployment rate has held steady near record lows. The Consumer Price Index shows inflation is back under control.
The challenge to accepting this state of economic bliss for Americans is the growing piles of both public and private sector data which conflicts with what bureaucrats have to say.
Unfortunately, questioning the integrity of government statistics still appears taboo, at least at The Wall Street Journal and elsewhere in the corporate financial press.
The Journal recently published an article titled “American Borrowers Are on Shakier Ground.” The first two paragraphs reinforce the official line, which is that the U.S. economy is strong, and fears of a recession are fading. Then the authors lay out a whole lot of data which shows an economy that is in serious trouble.
Households are increasingly reliant on credit card debt, where interest rates have soared.
Average balances are much higher than two years ago, and credit card delinquencies are above 3% for the first time since 2011. The same is true for auto loans. Banks are writing them off at the highest rate since 2011.
Seventeen percent of Americans have a bill, whether it be a car payment, utility bill, or monthly rent/mortgage payment which went unpaid last month.
About 40% of people with student loans missed their first required payment after the hiatus on payments ended last fall.
The recession bullet hasn’t been dodged. The people making that claim all seem to work for the government, or in the unquestioning corporate press.
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