Ugly Economic News

Aside from the hike in jobless claims this week (up 10,000 to 424,000; earlier in the week it had been revised to 404,000, so in essence, up 20,000), the look at GDP was poor, too.
The number for the GDP was “expected” to be 2.2%, but it was a poor 1.8%. Steve Liesman on CNBC calls it a “pause in the first quarter.” Others are not in agreement.
Tyler Durden at Zero Hedge blog sees it this way. “Contraction is far more pronounced,” he writes. “Personal consumption expenditures missed by a whopping 21%, plunging from 2.7% to 2.2% on expectations of a rise to 2.8%. As a result, the growth in Q1 was based on even shakier grounds… ex the now traditional inventory build, Q1 GDP was sub 1%. Which means that once the inevitable liquidations commence, the U.S. will go into all out contraction.”
“The key word for 2011, stagflation, is now firmly entrenched.”
Add to that the news today that foreclosures are astronomically high. They make up 28% of all home sales. That is six times higher than it would be in a healthy world economy.
Food, too, has gone up about 36% according to some numbers. Oil is still above $100 and likely to climb.
Stagflation, indeed.

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