Thanks to media that have absolutely no understanding of the economic-related news they are attempting to cover, it is commonly believed that the U.S. is no longer in a recession. The Bureau of Economic Analysis’ advance report for fourth-quarter Gross Domestic Product, usually known as GDP, increased at a rate equivalent to 5.7 percent growth on an annual basis, more than twice the average GDP growth since 1950. This would be astonishing if there were any chance whatsoever that it were real.

Even those who believe in the reality of the economic recovery readily admit that the GDP number has very little practical significance. In practical terms, 3.4 percent is attributed to business inventory adjustments. So in other words, more than half of this so-called “growth” is not even thought to be indicative of actual economic activity, but merely represents accounting modifications. And, of course, GDP is reported in three scheduled reports, and since the third quarter report was whittled down from 3.5 percent to 2.2 percent from advance to final, most observers expect to see similarly negative revisions that will all but eliminate the non-inventory growth.  Full Piece