WHAT BANKING INCOME IN THE USA TELLS US ABOUT THE STATE OF THE US ECONOMY.

The US GDP Report was positive. But under the hood it was the weakest quarterly print this year. Additionally, the surprisingly low deflator raises questions as to whether the economy actually grew in real terms. The Implicit Price deflator YoY is 7%. But, over the same period the CPI was 8.32%, the PPI (Producer Price Index) was 12.8% and the IPI Import Price Index) was 7.5%, and when we weight them 68.2% 17.9% and 15.4% as a share of GDP, we arrive at a deflator of 9.12%. That almost wipes out the growth of 2.6% QoQ. It seems this was a quarter boosted by the export of guns and gas.