ECONOMY & MAIN STREET • THE MIDDLE-CLASS SQUEEZE
BEA releases its final Q2 GDP estimate this morning. Everyone will lead with the 1.5% growth figure. Almost nobody will lead with this. The GDP deflator measures prices across the entire economy — not just your groceries, but the steel in your truck, the lumber for your deck, the rent on your buddy’s warehouse. It jumped from 3.6% in Q1 to 6.4% in Q2. That’s the worst reading since Q2 2022, when inflation was front-page news every single day. Prices are rising more than four times faster than the economy is growing.
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For every dollar of real growth the economy produced last quarter, prices ate four dollars and twenty-seven cents.
