#Economy & #Stocks Review - Q2 US GDP A Mirage

E&S Review

Much of today's economic data, including officially collected and produced time series, is highly unreliable. Statisticians use well-documented techniques such as geometric smoothing, seasonal adjustments, substitution, double counting, and hedonic adjustments to modify economic outcomes dating back to the 1980s. Politicians and central bankers often leverage these techniques for political gain.

Data manipulated by these statistical methods are frequently revised without clear notification to the public, especially when administrations or public policies change.

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Q2 US GDP A Mirage

The U.S. economy grew faster than expected in the second quarter, with GDP rising at an annualized rate of 3.3%, up from an initial 3.0% estimate. Stronger consumer spending and business resilience helped boost growth despite ongoing tariff-related uncertainty. Consumer spending rose 1.6%, and a key measure of domestic demand, final sales to private domestic purchasers, increased to 1.9%.

Trade figures were heavily influenced by tariffs: imports dropped 29.8% after a stockpiling surge, while exports fell 1.3%, resulting in net exports adding significantly to GDP. Despite a 0.5% contraction in Q1, the economy grew 2.1% in the first half of the year. Looking ahead, slower growth around 1.5% is expected as tariff impacts become more visible. Inflation remained stable, with core PCE up 2.5% and headline PCE at 2%, matching the Fed’s target.

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