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Alan Reynolds shares commentary from Brian Wesbury, noting that real U.S. GDP for the fourth quarter was revised down to a 0.7% annualized rate. According to Wesbury, the more concerning development is that the GDP price index, a key inflation measure, was revised higher to a 3.8% annualized rate.
The revisions indicate slowing economic growth and persistent inflationary pressures late in the quarter. Reynolds highlights the dual impact of these changes for market watchers.
These persistent inflationary signals align with Reynolds’s prior examination of how U.S. gasoline prices closely track global crude oil moves, underscoring the interconnectedness of energy costs and broader price trends. His skepticism toward relying solely on monthly producer price changes as an inflation indicator, as seen in his analysis of the January PPI spike, further illustrates the complexities facing policymakers and market participants in interpreting short-term economic data.