GDP Hides Industrial Decline
21 hours ago
- #manufacturing
- #economics
- #GDP
- U.S. GDP data suggests manufacturing growth, but real-world observations show a decline in domestic production of goods.
- The 'real value-added' method used in GDP calculations is flawed, leading to misleading statistics about manufacturing output.
- Quality adjustments and input substitutions in GDP calculations can create nonsensical results, such as increased 'value-added' despite lower actual production.
- Nominal value-added comparisons between countries are problematic because they don't account for differences in cost structures and actual output quantities.
- Alternative measures like BEA's real gross output and Federal Reserve's industrial production index also show a decline in U.S. manufacturing per capita.
- The U.S. has lost dominance in key industries like semiconductors, solar panels, and shipbuilding, with China taking over significant market shares.
- Quality adjustments in GDP are subjective and lack transparency, making it difficult to separate actual production increases from perceived quality improvements.
- The decline in U.S. manufacturing is evident across multiple sectors, including automobiles, pharmaceuticals, and machinery, with few exceptions like medical equipment and space technology.