Editor's Note: Below is a brief excerpt and chart from today's Early Look written by Hedgeye CEO Keith McCullough. Click here to learn more.
"... A few points on why we’ve been revising GDP higher throughout the quarter:
- The government has been understating “inflation” in both GDP and PCE Consumption reports
- When you understate inflation, you can overstate “real” consumption and GDP growth
A real-world example of this is Retail Sales. Because it’s reported nominally, lower gas prices actually drag on reported growth while higher prices – despite acting as a tax on real consumption – actually manifest as stronger reported growth."