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John Williams continues:


“In an environment where politicians and Wall Street increasingly are hyping an economic recovery ... Main Street U.S.A. usually has a pretty good sense of actual business activity, irrespective of the hype out of Wall Street or Pennsylvania Avenue. 


As discussed in the hyperinflation report, a major reporting problem in the system is the understatement of inflation used in deflating the economic series.   The use of understated inflation in deflating data results in an overstatement of the inflation-adjusted numbers.  Following are graphs that represent official reporting or that have been corrected, at least partially, for inflation understatement.  These graphs are updated from the referenced hyperinflation report.




The Consumer Remains Crushed.  The consumer’s ability to sustain positive, real economic consumption and growth remains constrained by a structural lack of liquidity, reflected in low or declining levels of real median household income and shrinking consumer credit, excluding federal lending on student loans. 


On top of the lack of ability to spend, consumers are indicating a lack of willingness to spend, as indicated in the March consumer confidence and consumer sentiment numbers.  Although the confidence measures are off their historic lows, at least temporarily, those measures still are at levels never have seen outside of severe recessions.


There simply can be no sustainable recovery in broad economic activity until the structural problems in consumer income and liquidity are resolved.”


Williams illustrated how much the US economy has collapsed over the years:  “Deflated accordingly, the real (inflation-adjusted) new orders for durable goods level in February 2012 was 9.8% below the pre-2001 recession peak, on a six-month moving-average basis.  With no smoothing, the monthly level in February was 17.7% below the pre-2001 recession peak.”


The above was just a small portion of another top shelf report by John Williams of Shadowstats.


To subscribe to ShadowStats CLICK HERE.


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