Gross Output Beats GDP Signals

Gross Output (GO), which tracks spending at all production stages, shows real growth of only ~1.2% (or 0.3% with trade transactions) and a 5.6% annualized drop in business spending, contradicting a 3.8% GDP headline. GO’s broader scope can surface slowdowns that GDP masks, especially when inventory, trade, or consumer categories prop up GDP. Using GO alongside GDP gives an earlier read on recession risk and policy mistakes. — If GO is signaling a stall while GDP looks fine, media and policymakers risk misreading the cycle, misjudging tariffs, and setting the wrong monetary stance.