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Q3 Second Revision: 2.5% Vs 2.4% Expected, Inventory Build Slowdown To Punish Q4 GDP
The BEA has released its second revision to Q3 GDP: "Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 2.5 percent in the third quarter of 2010, (that is, from the second quarter to the third quarter), according to the "second" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 1.7 percent." Expectation was of 2.4%. The reason: inventories, inventories, inventories. "The acceleration in real GDP in the third quarter primarily reflected a sharp deceleration in imports and accelerations in private inventory investment and in PCE that were partly offset by a downturn in residential fixed investment and decelerations in nonresidential fixed investment and in exports." As noted previously the $40-50 billion upcoming Q4 decline in inventories will likely push Q4 GDP flat to negative. In other news, US PCE Core (Q3 S) Q/Q 0.8% vs. Exp. 0.8% (Prev. 0.8%), while US Personal Consumption (Q3 S) Q/Q 2.8% vs. Exp. 2.5% (Prev. 2.6%).
The change in real private inventories added 1.30 percentage points to the third-quarter change in real GDP, after adding 0.82 percentage point to the second-quarter change. Private businesses increased inventories $111.5 billion in the third quarter, following increases of $68.8 billion in the second quarter and of $44.1 billion in the first.
The second there is no more upward change in inventories, that 1.30% will go flat, or worse, negative. In other words, if Q4 GDP goes back to Q2 levels, that will be a swing factor of 2.6%, pushing Q4 GDP negative for the year.
Lastly, for those expecting final sales growth to persist in Q4 - good luck. The end of extended insurance benefits is estimated to take out about 0.5% of GDP alone. Then again, the data does comes from those funny, funny people at the BLS so be prepared for the glaringly and obviously impossible.
Full highly irrelevant report.
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No, no, no--Steve Leisman just told us how great everything is going! Swimmingly--no, really...
Who believes the official stats?
It's funny, I don't even more pay attention. This is noise.
Are those figures in Monopoly dollars?
No, as one must actually purchase the Monopoly game, thus lending some value to actual Monopoly money. More like Confederate money, maybe.
well, in January I had forecast of - 2% growth for 2nd half 2010. I was close. Certainly closer than the big banks estimates.
I'm going out on limb and suggesting -5% GDP growth next year due to spiraling economic disasters and the overwhelming wild cards out there.
I have no idea what stocks will do or the dollar. Ben is in control of that and that man is one hell of a con man.. so who the heck knows what he'll do.
You're missing the point, JT, next year will be varying between +3.6 and +4.2. Politics and The Ben Bernank are an awesome team.
Alen Simpson says he can't wait for the blood bath next April. This man is sick.
http://larouchepac.com/node/16589
Disappointing. I thought he meant real blood of politicians. Oh well. I'll keep waiting.
He may well be eating his own words.
Sick? It's about time we had a blood bath in the government deficit. Are you kidding? The guys a freakin' genius.
In a debt-based monetary system, 'principal' is 'money'. For example, before money is placed in circulation amongst us, the private Federal Reserve Gosbank must receive a US Treasury Bond in return for their freshly printed, private Federal Reserve Note. Of course, eventually, the 'principal' of this Treasury Bond, plus 'interest', must be paid back to the private Federal Reserve Gosbank. However, in order to get 'interest', more debt-based 'principal' must be created to pay off the original Treasury Bond.Further, extinguishing all 'principal' with 'interest' will result in extinguishing the money supply. Keep in mind that a secondary money supply exist through the process of fractional reserve counterfeiting which only special individuals called 'bankers' are allowed to do.
my question is: does anyone else see this as a clear ponzi scheme that will only end in tears when debt is unable to expand exponentially for an infinite amount of time?
http://www.zerohedge.com/forum/how-do-we-arrive-eve-our-collapse-1rice. beans. noodles. tuna fish. cranberry juice. bandaids. clorox. soap. drinking water. silver coins. bullets. arrows. knives.
inventory, inventory, inventory!
You forgot V8 and sterno.
I don't believe anything coming out of BLS or any of the other make believe number. This is a systemic fraud. Fuck em. Like 2.5 GDP is gonna pay that 14T deficit. It's like I'm living in some fantasy/nightmare where not one miscreant is capable of simple math.
So, the savings rate is Up, wages are flat, unemployment insurance is running out, the 'back to school' sales were a disappointment and final sales were revised up from+.6% to +1.2%? Hey, whatever it takes to beat the concensus I guess...
And not for nothing but the downward revision in net imports to exports certainly wasn't what Long Beach experienced - our busiest port.
Surely, the long-term un/under-employed, the 99'ers and those about to roll off the back-end forever will be jumping for joy at this "news".
Tarzan will flatten his position in Cotton today.
Private businesses increased inventories $111.5 billion in the third quarter, following increases of $68.8 billion in the second quarter and of $44.1 billion in the first.
How much of this is REO property/inventory--how much debt was issued last qtr and shipped overseas--this is called financial services production--how many autos were manufactured overseas yet counted as sales via the homeland?? and as such added to GDP--nothing but smoke and mirrors.
As someone has posted before--watching the left hand but not paying attention to the right hand.
Utopia folks
Now I have to go back and listen to my Hanna Montana CD
private inventories up as everyone stockpiles silver and canned goods
I don't give much creed to the numbers that come out
The reaction and comments made by the TPTB are more telling