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"John Williams’ Shadow Government Statistics" is an electronic newsletter service that exposes and analyzes flaws in current U.S. government economic data and reporting, as well as in certain private-sector numbers, and provides an assessment of underlying economic and financial conditions, net of financial-market and political hype. Full Subscription Details

VIEW SAMPLE ISSUES Latest Commentaries Subscription Subscription Flash Commentary No. 1449 September 16th, 2020

• Federal Reserve Will Maintain Its 0.00% to 0.25% Targeted Fed Funds Rate and “At Least” the Current Pace of Asset Purchases, For the Duration • Broad FOMC Outlook Appears Little Changed in Wake of September Meeting • Policies Will Continue Until Both Full Employment and Targeted, Prospective Inflation Running Above 2.0% Are Attained • FOMC Projections Suggest No Return to Normal Conditions Before 2024; Expectations Are for GDP Recovery of Pre-Pandemic Levels Around Fourth-Quarter 2021 • ShadowStats Conclusions: Policy Effects Will Mean a Continued Money Supply Spike, With Consumer Inflation Mounting Rapidly in the Next Six-to-Nine Months More ... September 16th, 2020 Flash Commentary No. 1448 September 14th, 2020

• Evolving, “L”-Shaped Economic Recovery Confirmed by Latest, Consistent Reporting of New Claims for Unemployment Insurance • August 2020 CPI and PPI Core Inflation Continued to Spike • Record Annual Money Supply Growth Foreshadows Higher Inflation • While Record Money Growth Appears to Be Topping, the Leading-Relationship Federal Reserve Monetary Base Annual Growth Is Surging Anew • Pending FOMC Could Look to Accelerate Already Record Money Supply Growth and the Pickup in Core Inflation • Broader Money Measures Should Resume Annual Expansion in September/October With Inflation Accelerating Sharply in Early 2021 More ... September 14th, 2020 Flash Commentary No. 1447 September 8th, 2020

• Economic Rebound Continues to Falter • August 2020 Payroll and Unemployment Details Show Intensifying Flattening in the Developing L-Shaped Recovery • Year-to-Year Decline in Payrolls Has Stabilized Around 7.0% (-7.0%), a Level Last Seen When the U.S. Economy Reset After World War II • Stalling Recovery Will Generate Greater Government Spending and Federal Reserve Monetary Excesses • Developing Record Shortfall in Third-Quarter Real Trade Deficit Has Negative Implications for Third-Quarter 2020 GDP • Handling of Needed Revisions to New Unemployment Claims Rivaled Reporting Games that President Nixon Wanted to Play • Bureau of Labor Statistics Still Cannot Count the Number of Unemployed Persons, Six Months into the Pandemic More ... September 8th, 2020 Economic Commentary No. 1446 September 2nd, 2020

• Amidst Mounting Inflation Dangers, the Weakening L-Shaped Recovery from the Pandemic-Shutdown Began to Look Even Softer in July and Early-August Reporting • Revised Second-Quarter GDP and Initial GDI and GNP Reporting Confirmed the Record Collapse, Wiping Out Five Years of Economic Growth, Resetting the Inflation-Adjusted Real U.S. GDP to Its Lowest Levels since 2014 • With the Below-Consensus, Limited Recovery Unfolding in Second-Half 2020, Real Value of the Full-Year 2020 U.S. GDP Will Be Lucky to Top That Seen in 2016 • Statistical Chicanery Surfaces Along With the L-Shaped Recovery; Department of Labor Rejiggers New Unemployment Claims for Happier, Pending Headlines, Without Providing Consistent, Restated Historical Data • Non-Recovering, L-Shaped U.S. Labor Force (Employment Plus Unemployment) Suggests Protracted Economic Collapse; 4.8 Million Unemployed Are Missing • Industrial Production and Employment Numbers Show Deepening Trouble, While Booming Retail and Home Sales Are Running Counter to Sinking Consumer Optimism and Finances • In March, the FOMC Exploded Money Supply and Inflationary Pressures to Fight the Pandemic-Driven Economic Collapse and Related Systemic Instabilities • Record Year-to-Year M1 Money Supply Growth in Early-August Topped 40% • With August Inflation Pressures Mounting, the FOMC Conveniently Has Retargeted Its Long-Standing Goal of 2% Core Inflation to the Upside • Mounting Hyperinflation Risks, Heavy Dollar Selling and Systemic Instabilities Promise New Highs Ahead for Gold and Silver Prices More ... September 2nd, 2020 Flash Economic Commentary No. 1445 August 12th, 2020

• Mounting, Fundamental Risks for Hyperinflation and Systemic Instabilities Promise New Highs for Gold and Silver Prices, Irrespective of the August 11th Sell-Offs • Historic GDP Collapse Wiped Out the Last Five Years of Economic Growth • Second-Quarter 2020 Real GDP Plunged at an Unprecedented, Albeit Consensus, Annualized Quarterly Pace of 32.9% (-32.9%), Down Year-to-Year by 9.5% (-9.5%) • Given Limited-Quality Hard Data, Has Headline Reporting Turned to the Consensus? • Benchmarked GDP Received a Boost from New Trade-Deficit Reporting Gimmicks • Nonetheless, Rebound from the Pandemic-Driven Economic Collapse Is Faltering • L-Shaped Economic Recovery Has Begun to Take Form, as July Jobs and Unemployment Improvement Decelerated, Amidst Continuing Pandemic-Disrupted Surveying and Reporting Quality Issues • Labor-Market Stress Has Intensified as Unemployment Claims Gyrate Around Still-in-Depression Levels; Fed Sees Early Indications of Renewed Pullback in Consumer Activity • U.S. Sovereign Credit Rating Rumblings Mount as Congress and the White House Negotiate a Second Round of Massive, Expanded Deficit Spending • Stalled Recovery Will Generate Even Greater Spending and Monetary Excesses • Federal Reserve Record Money Supply Expansion Continues, Despite Benchmarked Money Numbers Showing Minimally Slower Growth More ... August 12th, 2020 Economic Commentary No, 1444 July 30th, 2020

• FOMC Continues to Hold Its Extraordinary Interest-Rate and Liquidity Policies in Place for Duration of the Pandemic-Disruption, Amidst Signs of Renewed Slowing in Economic Activity • Exploding Gold and Silver Prices, and a Weakening U.S. Dollar Are Sounding the Hyperinflation Klaxon • Major Inflation and Systemic Instabilities Lie Ahead • Reporting of Deepest-Ever GDP Decline Looms on July 30th • Annualized 49.1% (-49.1%) Quarterly Plunge in Household Survey Employed Was Consistent With a Real Second-Quarter 2020 GDP Annualized Collapse of 50% (-50%) and Year-to-Year Drop of 16.1% (-16.1%) • Potential Third-Quarter 2020 GDP Annualized 20% Rebound Still Would Be Down 12.7% (-12.7%) Year-to-Year, Rivaling Great Depression Depths and Post-World War II Readjustment • Economic Recovery Will Be Protracted • Not Credible! June Real Retail Sales Recovered Pre-Pandemic Levels, Contrary to Better-Quality Numbers; Yet Second-Quarter Real Sales Still Fell at an Annualized 24.2% (-24.2%) Pace • June Cass Freight Index® Fell 17.8% (-17.8%) Year-to-Year, Its 19th Consecutive Annual Decline • Second-Quarter Industrial Production Annualized Plunge of 42.6% (-42.6%) Was Worst Since the Post World-War II Production Readjustment More ... July 30th, 2020 Flash Commentary No. 1443 July 23rd, 2020

• Previewing Special Economic Commentary No. 1444 • Soaring Gold and Silver Prices, and a Weakening U.S. Dollar Increasingly Foreshadow Potential Hyperinflation and Systemic Instabilities • Reporting of Deepest-Ever GDP Decline Looms on July 30th • Annualized 49.1% (-49.1%) Quarterly Plunge in Household Survey Employed Was Consistent With a Real Second-Quarter 2020 GDP Annualized Collapse of 50% (-50%) and Year-to-Year Drop of 16.1% (-16.1%) • Potential Third-Quarter 2020 GDP Annualized 20% Rebound Still Would Be Down 12.7% (-12.7%) Year-to-Year, Rivaling Great Depression Depths and Post-World War II Readjustment • Economic Recovery Will Be Protracted More ... July 23rd, 2020 Flash Commentary No. 1442 July 9th, 2020

• Soaring Gold and Silver Prices Reflect Intensifying Investor Concerns for Inflation Risk and Systemic Instabilities • Rising Gold Prices Suggest Central Banks and Treasury Departments Are Not Doing Their Jobs; Any Related Market-Dampening Interventions Should Prove to Be Short-Lived • Annual Growth in June 2020 Money Supply Measures Set Record Highs; Consider That June Money Supply M1 Year-to-Year Growth Hit 37% • June 2020 Financial-Weighted U.S. Dollar Just Turned Negative Year-to-Year • July 30th Second-Quarter 2020 Gross Domestic Product Initial Reporting Should Show Unprecedented, Annualized Real Contraction of About 50% (-50%) • Consensus Forecasts Are Centering on a More-Modest Record Plunge of 35% (-35%), Yet, Bottom Bouncing Headlines for Some April and May Numbers Were Not Reliable • June and July Reopening Instabilities Threaten Hopes for a Meaningful, Nascent Upturn; Protracted Recovery Likely Will Be L-Shaped, Not V-Shaped • First Full Second-Quarter 2020 Headline Reporting: Household Survey Employed Plunged at an Annualized Quarterly Pace of 49.1% (-49.1%), as Corrected by the Bureau of Labor Statistics for Continuing Misclassification Errors • May 2020 U.S. Trade Deficit Deepened Sharply, Signaling Second-Quarter GDP Trouble • Both Collapsing May Exports and Imports Signaled a Collapsing Global Economy More ... July 9th, 2020 Special Commentary No. 1441 June 24th, 2020

• U.S. Economic Activity Was Faltering Before the Pandemic-Driven Collapse • Pre-Pandemic Economic Troubles Were Driven Primarily by Intensifying Federal Reserve Policy Malfeasance • March 2020 Economic Numbers Took the Initial Hit of the Pandemic Shutdown, Pulling First-Quarter 2020 GDP into an Annualized 5.0% (-5.0%) Contraction • April 2020 Saw the Worst-Ever Monthly Collapses in Industrial Production, Nonresidential Construction, Payrolls and Retail Sales • May 2020 Saw Dead-Cat Bounces in Monthly Production and Construction, Some Bottom-Bouncing in Payrolls and Rebounding Retail Sales; the Latter Two Series of Questionable Reporting Quality • In Its 18th Straight Month of Annual Decline, the May 2020 Cass Freight Index® Notched Lower, Closing in on Its Record Trough of the Great Recession • Second Year of Federal Reserve Reporting Delays Look to Exclude Long Overdue, Pre-Pandemic Downside Revisions to Industrial Production from the July 30th Second-Quarter 2020 GDP Estimate and Annual Benchmark Revisions • All Considered, Initial Second-Quarter 2020 Real GDP Holds on Track for the Deepest-Ever Annualized Quarterly Contraction, Down by Roughly 50% (-50%) • Protracted Recovery Likely Will Be L-Shaped, Not V-Shaped More ... June 24th, 2020

• June FOMC Outlook: Deepening Near-Term Economic Collapse, Protracted Recovery • Unlimited Money Creation and 0.00% to 0.25% Fed Funds Promised for Foreseeable Future • May 2020 Money Supply M1, M2 and M3 Annual Growth Rates Accelerated to Record Highs • Additional Explosive U.S. Government Deficit Spending and Debt Expansion Likely Follow • Early Inflation-Danger Signal: Monthly May Producer Price Inflation for Goods Spiked at a Record Pace, Reflecting Shortage-Induced 44% Surge in Meat Prices • Fed Chairman Powell Confirmed Second-Quarter 2020 Real Gross Domestic Product Likely Will Show Its Deepest Quarterly Contraction in History • ShadowStats Forecast for Second-Quarter 2020 Real GDP Contraction Remains Order of Magnitude 50% (-50%) Annualized Quarter/Quarter, 16% (-16%) Year/Year • Third- and Fourth-Quarter GDP Could See Some Bottom Bouncing, Depending on the Magnitude and Success of Reopening Efforts • Federal Reserve Board Members Forecast Fourth-Quarter 2020 Real GDP Annual Decline of 6.5% (-6.5%), Worst in Modern Quarterly Reporting, Other Than for Likely Deeper, Intervening Second- and Third-Quarter Annual Contractions More ... Flash Commentary No. 1440 June 13th, 2020 Archives DAILY UPDATE (September 23rd to 24th) - Next Publication: Economic Commentary, Issue No. 1450 should post late-September 24th, covering recent August economic releases. - Pending Data: Thursday, September 24th, August 2020 New Home Sales. • G E N E R A L .. H E A D L I N E S .. - Pandemic-Driven U.S. Economic Collapse Continues in a Hardening, Protracted “L”-Shaped Recovery - Panicked, Unlimited Federal Reserve Money Creation and Federal Government Deficit Spending Continues and Has Begun to Trigger Major Domestic Inflation - With Dollar Debasement Intensifying, Holding Physical Gold and Silver Protects the Purchasing Power of One’s Assets Scroll down for the latest ShadowStats outlook, headline economic news and background information on the U.S. Economy, Financial System (FOMC), Financial Markets and Alternate Data, also for Publicly Available Special Reports and Contact Information. • L A T E S T .. August 2020 Cass Freight Index® Annual Contraction Turned Less Negative, Counter to Faltering Annual Growth in August Manufacturing and Retail Sales (September 21st, CassInfo.com, see detail at https://www.cassinfo.com/freight-audit-payment/cass-transportation-indexes/august-2020). The year-to-year annual decline of 7.6% (-7.6%) in the August 2020 Cass Freight Index® still remained deep in Pandemic-driven recession territory, continuing its monthly narrowing versus the July 2020 decline of 13.1% (-13.1%), its 17.8% (-17.8%) drop in June, and its near-record annual plunge of 23.6% (-23.6%) in May, which held shy of the April 2009 Great Recession trough record plunge of 25.0% (-25.0%). Nonetheless, the Cass Index’s consecutive monthly year-to-year declines and the still-deepening month-to-month declines in the 12-month trailing average held in place for the 21st straight month, which date back to the pre-Pandemic heady days of December 2018. Those year-to-year and 12-month-moving-average metrics neutralize seasonality in this unadjusted series. ShadowStats regularly follows and analyzes the Cass Index as a highest-quality coincident and leading indicator of underlying economic reality. We thank Cass for their permission to graph and to use their numbers in our Commentaries. (September 17) Annual Change in Both Unadjusted Weekly New Claims for Unemployment Insurance (Sep 12) and Insured Unemployment (Sep 5) Eased Back from the Prior Week’s Surge. (Department of Labor – DOL). Year-to-year change in both New and Insured Claims stabilized in the latest unadjusted headline weekly detail, against the prior week’s one-week surge, which likely reflected seasonal distortions from Labor Day in 2020 being a week later than in 2019. Allowing for that circumstance, the improvement seen in downtrending claims in recent months appears to have flattened out, consistent with an evolving “L”-shaped economic recovery. The headline seasonally adjusted data no longer are historically consistent due to recent DOL changes in reporting methodologies. See No. 1448 and pending No. 1450 for full details. (September 17) August 2020 New Residential Construction Declined for the Month, on Top of Downside Revisions to July Activity, With Collapsing Multi-Unit Permits and Starts More than Offsetting Surging Single-Unit Permits and Starts (Census Bureau). In context of regular extreme volatility in the monthly headline details and prior-period revisions, August Building Permits and Housing Starts respectively showed statistically meaningful monthly declines of 0.9% (-0.9%) and 5.1% (-5.1%), against downwardly revised levels of July activity. Such were the first month-to month declines in the post-Pandemic recovery period. That said, Single-Unit Permits and Starts respectively jumped by 6.0% and 4.1% month-to-month, but Multiple-Unit Permits and Starts plunged respectively by 14.2% (-14.2%) and 22.7% (-22.7%), turning both the aggregate Permits and Starts negative for the month. August 2020 Permits and Starts held shy of ever recovering their pre-Great Recession peak levels of activity, respectively by 35.0% (-35.0%) and 37.7% (-37.7%). (September 16) FOMC Will Maintain “At Least” the Current Pace of Asset Purchases, Still Targeting Fed Funds at 0.00% to 0.25% for the Duration, While Targeting “Core” Inflation in Excess of 2.0%, per the September Meeting (Federal Reserve Board - FRB, Federal Open Market Committee - FOMC). The FOMC is maintaining its panicked liquidity and interest rate policies, as expected, with the new twist of targeted “core” inflation, net of food and energy, aimed at boosting inflation above 2.0% [see No. 1446]. FOMC stimulus polices will remain in play until the economy returns to “full employment,” with “core” inflation above 2.0%. See No. 1448 and today’s No. 1449 for extended detail. Further explosive Money Supply growth and soaring “Core” Inflation loom. (September 16) August 2020 Real Retail Sales Declined by 0.08% (-0.08%), Net of Revisions and Inflation, Well Below Expectations (Census). Before inflation adjustment, the nominal monthly gain in August Retail Sales of 0.56% (0.29% net of revisions) was on top of a downwardly revised July gain of 0.87% [previously 1.24%]. Net of CPI-U inflation (St. Louis Fed), Real Retail Sales gained 0.18% in the month [declined by 0.08% (-0.08%) net of revisions], versus a downwardly revised monthly gain of 0.28% [previously 0.65%] in July. Real year-to-year growth slowed to 1.23% in August 2020, from a downwardly revised 1.40% [previously 1.69%] in July. While headline real Retail Sales activity still recovered pre-Pandemic levels of activity in June 2020 -- running counter to a collapse in related payrolls and freight activity -- levels of activity in July and August effectively have been flat, running roughly parallel with the developing “L”-shaped recoveries in economic series of better-quality reporting. Expanded coverage follows in No. 1450. (September 15) UPDATED INCOME AND POVERTY – Census Bureau Suggests Serious Data Flaws and Surveying Distortions With Its Just-Published 2019 Annual Income and Poverty Survey (Census). Both the headline annual real Median Household Income increase of 6.8% in 2019 to an all-time high, and the 1.3 percentage point drop in the 2019 Poverty Rate -– all happy news, if true -- were not credible. Income growth likely was heavily overstated. Shortly after the Survey’s release, in an extraordinary statement, the Census Bureau declared that, “Given-data collection challenges during the pandemic, we are concerned about bias in the 2019 estimate.” Although the numbers were for the pre-Pandemic period, the surveying was conducted at the depths of the most disruptive phase of the shutdown. The 2019 Income and Poverty Survey will be reviewed realistically in No. 1450. Separately, two regular big issues with the Survey are (1) the definitionally gimmicked CPI-RS inflation rate is used to deflate the income measures, which meaningfully understates historical inflation [not viewed as an issue by Census], and (2) the year-to-year data rarely have been comparable in the last decade, including 2019. (September 15) Pace of Annual Decline in August 2020 Industrial Production Deepened to 7.7% (-7.7%), from 7.4% (-7.4%) in July 2020 (Federal Reserve Board – FRB). Recovery from the Pandemic-driven economic collapse took a step backwards in August, with a deepening annual contraction in aggregate production. Such was in the context of slowing growth in monthly activity, on top of downside revisions to March through May and upside revisions to June and July (reflected in both Manufacturing and Mining). Month-to-month growth in total Production slowed to 0.36% in August from 3.53% in July, with Manufacturing slowing to 0.98% from 3.87%, and with Mining declining by 2.50% (-2.50%, having gained 1.43% in July. Year-to-year, August Manufacturing declined 6.91% (-6.91%) versus a drop of 7.26% (-7.25%) in July, with Mining down by 17.94% (-17.94%) in August, versus 13.89% (-13.89%) in July. Further detail follows in No. 1450. (September 10/11) August 2020 M1 Money Supply Growth Hit a Record High 40.0% Year-to-Year Growth Rate, Amidst Continued Extreme Systemic Liquefaction by the Fed and Related, Mounting Domestic Inflation Pressures (FRB; ShadowStats Ongoing M3 Estimate). In the context of massive money supply expansion by the Fed and a general market shift to holding more-liquid assets, seasonally adjusted annual growth in the most liquid M1 Money Supply category rose to an unprecedented 40.0% in August 2020, from its prior record annual gain of 38.1% in July. While August M2 increased month-to-month, its annual change stagnated at its record high 23.3%, while the ShadowStats Ongoing M3 estimate showed a small monthly decline, with annual growth slowing for a second month, to 24.5%, down from 25.7% in July and a record 26.6% in June. Where annual growth in the Monetary Base led M3 lower, the Monetary Base annual growth again is on the rise. UPDATE (September 16) -- The September FOMC just reaffirmed expansive money growth. Related graphs and methodology are available to all on the ALTERNATE DATA tab above, also accessible by clicking on the mini-graph below, along with subscriber-only data downloads. Extended detail is in No. 1448. (September 11) Mounting Inflation Pressures -- Other Than for July’s 0.62% “Core” Inflation, the August 2020 Consumer Price Index “Core” Inflation of 0.39% Was the Highest Reading in 25 Years. (Bureau of Labor Statistics). As negative inflation impact from the oil-price war continues to dissipate, monthly headline CPI-U continued to come in stronger than expected in August 2020, up 0.4% (0.37%) [0.3% expected], versus 0.6% (0.59%) [0.3% expected] in July, up year-to-year by 1.31% in August versus 0.99% in July. Net of food and energy prices, monthly “Core” inflation continued spiking to levels not seen in decades. Year-to-year headline “Core” CPI-U should top the FOMC’s former upper limit of 2.5% in the next month or two; hence, the recent change in “targeting,” see also No. 1449. August 2020 ShadowStats Alternate CPI (1980 Base) Rose to 9.0% Year-to-Year, versus 8.6% in July, 8.3% in June and 7.7% in May. The ShadowStats estimate restates current headline inflation so as to reverse the government’s inflation-reducing gimmicks of recent decades. Related graphs and methodology are available to all on the ALTERNATE DATA tab above. Subscriber-only data downloads and an Inflation Calculator also are available there. Extended detail is in No. 1448. (September 10) August 2020 Producer Price Index Annual “Core” Inflation Hit an 11-Month High of 0.8% (BLS). As negative inflation impact from the oil-price war dissipates, year-to-year declines in the Total and the Goods-based PPI have narrowed. Where the more-meaningful PPI Final Demand Goods series declined by 1.64% (-1.64%) year-to-year in August [narrowed from 1.98% (-1.98%) in July], August “Core” inflation, net of declines in both Food and Energy, jumped by 0.77% year-to-year [up from 0.51% in July], its highest level since 0.86% in September 2019. Incorporating the mal-defined Services-based series, the total August PPI-FD gained 0.34% in the month [up 0.60% in July], and declined 0.17% (-0.17%) year-to-year [down 0.42% (-0.42%) in July]; see extended detail in No. 1448. (September 4) August 2020 Payrolls Continued to Show an Unfolding “L”-Shaped Economic Recovery, With the Headline Unemployment Rate Understated for the Sixth Straight Month (BLS). Meaningful quality and credibility issues continue to plague the “improving” headline labor numbers. The August 19th preliminary annual downside benchmark revision of 173,000 (-173,000) to March 2020 payrolls (see No. 1446) will not be adjusted into headline monthly reporting until February 2021. While August Payrolls gained month-to-month for the fourth month, the monthly slowing in annual decline is taking on the form of an “L”-shaped recovery. Year-to-year payrolls declined into an initial April 2020 trough of 13.4% (-13.4%), narrowing to 11.7% (-11.7%) in May, but have begun to flatten out at 8.7% (-8.7%), 7.7% (-7.7%), and 7.0% (-7.0%) in June through August. Similar patterns in industry payrolls ranging from Retail Sales and Construction to Manufacturing suggest a slowing pace of economic recovery. The BLS acknowledged that continued misclassification of “unemployed” persons as “employed” persons in the Household Survey might have reduced a potential headline July U.3 unemployment rate of 9.1% to the headline 8.4%. Whatever the difference, official headline unemployment was understated meaningfully for the sixth straight month, due to survey “misclassifications.” Headline U.3 unemployment dropped to 8.42% in August, from 10.22% in July, headline August U.6 declined to 14.24% from 16.53%, with the headline August ShadowStats Alternate Measure, on top of U.6, at 28.0%, down from 30.0%, as graphed and detailed on the ALTERNATE DATA tab, linked above. See No. 1447. (September 3) The July 2020 Trade Deficit Widened Sharply, Unexpectedly, Likely Taking a Notch Out of Third-Quarter GDP Expectations (Census, Bureau of Economic Analysis - BEA). The U.S. Trade Deficit widened by $10.1 billion in July, to $63.6 billion, up from a revised $53.5 billion (initially $50.7 billion) in June. Surging imports of automobiles from Canada were a factor. Net of inflation, the real Merchandise Trade Deficit widened sharply in July, putting 3q2020 on track for an annualized $1.086 trillion deficit, versus a revised $987.6 [previously $990.3] trillion in 2q2020. Such should dampen the consensus outlook a bit for 3q2020 GDP growth (see No. 1447). (September 1) On Top of Upside Revisions to May and June Activity, Nominal July 2020 Construction Spending Gained 0.1% in the Month [Up 0.7% Net of Revisions] and Was Down by 0.1% (-0.1%) Year-to-Year (Census). In real terms, net of related inflation, total Construction Spending declined by 0.5% (-0.5%) in the month, down by 2.2% (-2.2%) year-to-year, broadly consistent with the annual decline of 4.3% (-4.3%) in July 2020 Construction Payroll Employment, and consistent with something less than an “L”-shaped post-Pandemic shutdown recovery. The dominant positive component in July activity was Residential Construction, up by a nominal 2.1% in the month (up 2.4% net of revisions). Expanded detail in No. 1446. (August 27) Record Collapse in Second-Quarter 2020 GDP Eased Minimally in Revision, With Even-Weaker Initial GDI and GNP Reporting (Bureau of Economic Analysis - BEA). Annualized Second-Quarter 2020 Real Gross Domestic Product (GDP) -- broadest measure of the U.S. economy –- showed a revised collapse of 31.70% (-31.70%) [previously 32.90% (-32.90%], with a revised annual drop of 9.14% (-9.14%) [previously 9.54% (-9.54%)]. Broader Gross National Product (GNP) [GDP net of the trade deficit in factor income (interest and dividends)] showed respective quarterly and annual declines of 34.48% (-34.48%) and 9.19% (-9.19%). Gross Domestic Income (GDI) [the income-side equivalent to the product-side GDP] showed declines of 33.09% (-33.09%) and 9.21% (-9.21%). Extended detail and discussion in No. 1446. • S Y S T E M I C .. R I S K - Ongoing Outlook: Economic and Systemic Crashes Should Intensify, Moving Towards a Hyperinflationary Economic Collapse. Economic, FOMC, financial-market, political and social circumstances continue to evolve along with the Pandemic, but the broad outlook has not changed. The September 15th to 16th FOMC reconfirmed its extraordinarily expansive, accommodative money policies, and its Fed Funds targeted rate of 0.00% to 0.25%, will continue for the duration of the Pandemic-driven economic collapse, combined now with its formal targeting of “core” inflation above 2.0%. Systemic turmoil is just beginning, with the Fed and U.S. Government driving uncontrolled U.S. dollar creation, with annual Money Supply growth soaring to successive record highs (see the ALTERNATE DATA TAB and extended discussion in Special Hyperinflation Commentary, Issue No. 1438, 1440, 1442, 1444 and 1449. Discussed in Nos. 1446 and 1449, the FOMC has opted to increase its targeted “core” inflation rate. See expanded discussion in pending No. 1450 SHADOWSTATS ALERT: In context of the evolving Coronavirus Pandemic and related or exacerbating crises, near-term financial-market risks from negative economic, liquidity and political issues, are intensified by potential Hyperinflation, long viewed by ShadowStats as the ultimate fate of the U.S. Dollar. That said, the ShadowStats broad outlook in the weeks and months ahead continues for: (1) A continuing, rapidly deepening (potentially hyperinflationary) U.S. economic collapse, reflected in (2) Continued flight to safety in precious metals, with accelerating upside pressures on gold and silver prices, (3) Mounting selling pressure on the U.S. dollar, against the Swiss Franc, and (4) Despite recent extreme Stock Market volatility, continuing high risk of major instabilities and heavy stock-market selling, complicated by ongoing direct, supportive market interventions arranged by the U.S. Treasury Secretary, as head of the President's Working Group on Financial Markets (a.k.a. the “Plunge Protection Team”), or as otherwise gamed by the FOMC. • P O S T I N G .. S C H E D U L E S .. SHADOWSTATS CONCURRENT ANALYSES OF NEW DATA: August 2020 New Home Sales will be posted by the Census Bureau, Thursday, September 24th at 10 am ET. ShadowStats analysis should follow by 1 pm ET. SHADOWSTATS COMMENTARIES: Subject to Change – Economic Commentary No. 1450 should post late September 24th, covering myriad recent economic releases: the August 2020 Cass Freight Index®, Industrial Production, and the 2019 Income and Poverty Report, August Retail Sales, August Housing Starts and the latest weekly New Claims, as well as new FOMC-related detail. Commentary postings are advised to Subscribers by e-mail, along with appropriate links. Details will follow here. It also will review further the latest FOMC actions and “Core” Inflation. • ARCHIVES - VIEWING EARLIER COMMENTARIES. ShadowStats postings of June 2020 and before - back to 2004 - are open to all, accessible by clicking on “Archives,” at the bottom of the left-hand column of this ShadowStats homepage. • ALTERNATE DATA TAB provides the latest headline data, exclusive ShadowStats Alternate Estimates and related Graphs of Inflation [Just Updated], GDP, Unemployment, Money Supply [Just Updated], and the ShadowStats Financial-Weighted U.S. Dollar. Data downloads are subscriber only. Best Wishes -- John Williams Have you ever wondered why the CPI, GDP and employment numbers run counter to your personal and business experiences? The problem lies in biased and often-manipulated government reporting. Primers on Government Economic Reports What you've suspected but were afraid to ask. The story behind unemployment, the Federal Deficit, CPI, GDP. Alternate Data Special Reports Public Comment on Inflation Measurement & the Chained CPI-U Public Commentary on Unemployment Update 2016 • Update 2015 • Hyperinflation 2014 • 2014 Second Installment • Deficit Reality Others: Consumer Liquidity, Depression, Money Supply. Specialized Economic Consulting Services include customized forecasts and analyses of the general economy, presentations and consultations in-house for clients. Contact us to discuss your needs. John Williams'

"Shadow Government Statistics"

johnwilliams@shadowstats.com

Tel: (707) 763-5786



John Williams

PO Box 2538

Petaluma CA, 94953-2538 Tel: (707) 763-5786John WilliamsPO Box 2538Petaluma CA, 94953-2538 Some Biographical & Additional Background Information Walter J. "John" Williams was born in 1949. He received an A.B. in Economics, cum laude, from Dartmouth College in 1971, and was awarded a M.B.A. from Dartmouth's Amos Tuck School of Business Administration in 1972, where he was named an Edward Tuck Scholar. During his career as a consulting economist, John has worked with individuals as well as Fortune 500 companies.



Although I am known formally as Walter J. Williams, my friends call me “John.” For 30 years, I have been a private consulting economist and, out of necessity, had to become a specialist in government economic reporting.



One of my early clients was a large manufacturer of commercial airplanes, who had developed an econometric model for predicting revenue passenger miles. The level of revenue passenger miles was their primary sales forecasting tool, and the model was heavily dependent on the GNP (now GDP) as reported by the Department of Commerce. Suddenly, their model stopped working, and they asked me if I could fix it. I realized the GNP numbers were faulty, corrected them for my client (official reporting was similarly revised a couple of years later) and the model worked again, at least for a while, until GNP methodological changes eventually made the underlying data worthless.



That began a lengthy process of exploring the history and nature of economic reporting and in interviewing key people involved in the process from the early days of government reporting through the present. For a number of years I conducted surveys among business economists as to the quality of government statistics (the vast majority thought it was pretty bad), and my results led to front page stories in 1989 in the New York Times and Investors Daily (now Investors Business Daily), considerable coverage in the broadcast media and a joint meeting with representatives of all the government's statistical agencies. Nonetheless, the quality of government reporting has deteriorated sharply in the last couple of decades. Reporting problems have included methodological changes to economic reporting that have pushed headline economic and inflation results out of the realm of real-world or common experience. Over the decades, well in excess of 1,000 presentations have been given on the economic outlook, or on approaches to analyzing economic data, to clients—large and small—including talks with members of the business, banking, government, press, academic, brokerage and investment communities. I also have provided testimony before Congress (details here). An old friend—the late-Doug Gillespie—asked me some years back to write a series of articles on the quality of government statistics. The response to those writings (the Primer Series available at the top-center of this page) was so strong that we started ShadowStats.com (Shadow Government Statistics) in 2004. The newsletter is published as part of my economic consulting services. — John Williams