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Q3 GDP Estimate Beats Expectations As Government "Consumption" Soars

Tyler Durden's picture





 

Moments before this morning's first look at the Q3 GDP print came out we tweeted the following:

Sure enough, the preliminary look at Q3 GDP just came out and "beat" expectations of a 1.8% print, with a 2.0% reading (or just in line with stall speed, a number which previously has been indicative of recessions). So far so good, but as with every other pre-election economic data point out of the government, one has to look behind the headline to get the true picture. And the details are, as expected, ugly. Because of the 2.02% annualized increase in GDP, over one third, or 0.71% (compared to a deduction of -0.14% in Q2, and 0.64% of the 0.71% came from defense spending), was contributed by "Government Consumption."  This was the biggest rise in government spending in 3 years, and only the first contribution by Uncle Sam to its own GDP print since Q2 2010. So in much the same way as the September jobs print soared courtesy of government employee hiring, this same government is now juicing its own numbers to make itself look better. The real question is what the second and third Q3 GDP revisions will show, which both come, luckily, after the election. Recall that Q2 GDP initially came out at 1.5%, then was revised to 1.7%, until finally coming to rest at 1.25%.

And in other news, Personal Consumption: the key driver for real economic growth, rose 2.0% in Q3, missing expectations of a 2.1% increase.

Source: Chinese Department of Truth BEA

 


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Fri, 10/26/2012 - 08:44 | Link to Comment slaughterer
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ObamaPhones, ObamaPads, ObamaEBTs save the day!

Fri, 10/26/2012 - 08:47 | Link to Comment GetZeeGold
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You forgot Obamabonds.

Fri, 10/26/2012 - 08:56 | Link to Comment slaughterer
slaughterer's picture

Government is buying the country out of the recession.  Yeah!  /sarc

Fri, 10/26/2012 - 09:14 | Link to Comment icanhasbailout
icanhasbailout's picture

Invisible hand of the market looked at those numbers and flipped Obama the bird

Fri, 10/26/2012 - 10:56 | Link to Comment asteroids
asteroids's picture

The GDP number is something that like the "un"employment number that is obviously being manipulated. Come to think of it GDP is a terrible measure of economic performance.

Fri, 10/26/2012 - 10:01 | Link to Comment Translational Lift
Translational Lift's picture

- Steve Goldstein ; 415-439-6400; AskNewswires@dowjones.com One reason GDP came in a bit stronger than forecasts was the strength in federal government expenditure. According to BNP Paribas economists, what really was going on was an increase in defense maintenance costs, which in fact was estimated by the government; this data will likely be revised in the future.

 

The curtain was pulled back from this empty administration when the current (sic) POTUS, teleprompterless, appeared before the American people at the first debate and showed just what an empty suit he is.

Fri, 10/26/2012 - 11:10 | Link to Comment Overfed
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Don't forget the spending required to equip all of those new Sturmabteilung recruits!

Fri, 10/26/2012 - 08:47 | Link to Comment malikai
malikai's picture

ObamaPads.

Now with 100% less absorbtion.

Fri, 10/26/2012 - 08:50 | Link to Comment Atlasshruggedme
Atlasshruggedme's picture

Perfect... never thought of the ObamaPad... Everyone needs to be able to access the internets with a pad. Not one of the cheap pads.. a Ipad4

Fri, 10/26/2012 - 09:37 | Link to Comment adr
adr's picture

I guess you didn't hear about the city of Cleveland Heights giving iPads to students.

Shortly after many of them were "stolen" requiring replacements.

The school system is about 85% black. So there you go Obamapads to go with the Obamaphones everyone in Cleveland gots.

Fri, 10/26/2012 - 09:05 | Link to Comment LongSoupLine
LongSoupLine's picture

Cramer says, "The numbers are good."

No further commentary required other than...

 

silver.

Fri, 10/26/2012 - 09:05 | Link to Comment ejmoosa
ejmoosa's picture

Don't forget the Government Motors movement of vehicles...more than 79% went to the government last month.

Fri, 10/26/2012 - 09:57 | Link to Comment spastic_colon
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I like the way everyone forgets that "government spending" means they used your "tax dollars" to game the system....now who outspent who?  fraud maybe?

Fri, 10/26/2012 - 08:44 | Link to Comment Cassandra Syndrome
Cassandra Syndrome's picture

What was the GDP Deflator?

Fri, 10/26/2012 - 09:14 | Link to Comment Acet
Acet's picture

+1 This

GDP numbers are calculated after removing the effects of inflation. The factor that reduces the GDP numbers to account for inflation is the GDP Deflator which is derived from official inflation numbers.

In simple terms, the higher the official inflation numbers, the higher the GDP Deflator and thus the lower the GDP numbers.

Fudge the Inflation numbers down and you've just fudged the GDP numbers up. I suspect that the US' positive GDP growth numbers of the last 5 years are all thanks to little-more-than-made-up-on-the-spot inflation numbers (for example, US inflation numbers don't include Food or Housing).

Fri, 10/26/2012 - 09:21 | Link to Comment Winston Churchill
Winston Churchill's picture

Dive, dive, dive.

 Govt.Stats in the water.

Fri, 10/26/2012 - 10:07 | Link to Comment Bay of Pigs
Bay of Pigs's picture

But Orly says there's no inflation if wages arent rising.

Hard to believe some of the outrageous bullshit and economic heresy written these days.

Fri, 10/26/2012 - 08:46 | Link to Comment john_connor
john_connor's picture

aggregate demand, bitchezz.

 

//sarc off

Fri, 10/26/2012 - 09:19 | Link to Comment Manthong
Manthong's picture

On the radio this morning regarding the positive GDP report:

“bouyed by consumer and defense spending”

The best of both worlds, I guess.

Fri, 10/26/2012 - 09:29 | Link to Comment GeezerGeek
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I misread it. I thought it said "consumer defense spending". Long Ruger.

Fri, 10/26/2012 - 08:47 | Link to Comment Shizzmoney
Shizzmoney's picture

When in doubt, just say the government "consumed" to get that GDP number up.

 

The number is irrelevant for today's economic world, anyways.  It's only existence is for policy wonks and stock/bond traders. 

We could have GDP at 5% and things would still be shitty. 

The economic problem we have isn't a macro problem; it's a micro problem (fraud).

Fri, 10/26/2012 - 09:00 | Link to Comment toomanyfakecons...
toomanyfakeconservatives's picture

Exactly... a mirco problem... nothing a few dozen prison buses, paddy wagons, and some Federal Marshalls couldn't clean up in a few days time... http://tinyurl.com/cd5cyjo/

Fri, 10/26/2012 - 08:47 | Link to Comment Stackers
Stackers's picture

Where's a death star to build when you need one ?

Fri, 10/26/2012 - 08:56 | Link to Comment toomanyfakecons...
toomanyfakeconservatives's picture

Tarkin: Princess Leia, before your execution, I'd like you to join me for a ceremony that will make this battle station operational. No star system will dare oppose the Emperor now.


Leia: The more you tighten your grip, Tarkin, the more star systems will slip through your fingers.


Tarkin: Not after we demonstrate the capabilities of this station.

Fri, 10/26/2012 - 08:48 | Link to Comment BurningFuld
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Well just wait until Mittens takes over. Cutting 20% of the Country's employees to improve the balance sheet is nothing for Mittens.  Watch out!

Fri, 10/26/2012 - 11:02 | Link to Comment GetZeeGold
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Just shows Mitt has compassion......cause we don't actually need half of them.

Fri, 10/26/2012 - 11:14 | Link to Comment Overfed
Overfed's picture

If I thought Willard would cut 20% of federal employees right off the bat, I'd acutally vote for him. But we all know that ain't gonna happen.

Fri, 10/26/2012 - 08:49 | Link to Comment Moneyswirth
Moneyswirth's picture

Obama is playing this perfectly.  He might just scam his way into re-election. 

Fri, 10/26/2012 - 08:49 | Link to Comment I Am Not a Copp...
I Am Not a Copper Top's picture

Just as I feared, the reversal in AAPLZN - Check.  The miraculous GDP beat - Check.  The 30 point ES ramp to miraculaously close green on the week - Coming to a theatre near you.  BTFD Bitchez.  Motherfuckingcocksuckers.  Fuck you Bernanke.

Fri, 10/26/2012 - 08:54 | Link to Comment Boilermaker
Boilermaker's picture

Joe Lunchbox only reads the headline.

Get used to this Goerbels shit.  It ain't stoppin' now.

Fri, 10/26/2012 - 09:33 | Link to Comment Richard Chesler
Richard Chesler's picture

Might be a better idea to STFP.

SELL THE FUCKING PUMPJOB!

Fri, 10/26/2012 - 08:56 | Link to Comment fonzannoon
fonzannoon's picture

Hang in there. The bullshit just stinks too much to ignore lately. Everyone knew Obama and Ben had come too far to quit at the finish line.

Fri, 10/26/2012 - 09:32 | Link to Comment GeezerGeek
GeezerGeek's picture

And Obama had the audacity to call Romney a bullshitter!

Fri, 10/26/2012 - 09:39 | Link to Comment Orly
Orly's picture

Not going to happen today, I am afraid.  Consumer sentiment numbers will be in the tank and the SPX will sell off for the rest of the day and won't stop until late Tusday afternoon.

Or not.

Fri, 10/26/2012 - 08:50 | Link to Comment Cursive
Cursive's picture

 

Recall that Q2 GDP initially came out at 1.5%, then was revised to 1.7%, until finally coming to rest at 1.25%

 

If ther is this much volatility in one metric - the same metric being revised twice and in different directions - why would any rational person put any faith in econometric data.  I have my own eyes and this economy is in the shitter.

Fri, 10/26/2012 - 09:35 | Link to Comment GeezerGeek
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This GDP number is for electioneering. Do you honestly think most of the supporters of Obama are rational persons?

Fri, 10/26/2012 - 08:50 | Link to Comment Water Is Wet
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Don't worry people.  Amazon is up $5 this morning.

Fri, 10/26/2012 - 08:51 | Link to Comment Boilermaker
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MISSION ACCOMPLISHED!!!

ES positive.

PHEW >>>patting forehead with wet cloth<<<<

Fri, 10/26/2012 - 09:17 | Link to Comment fuu
fuu's picture

<pats head with brick wall>

Fri, 10/26/2012 - 08:52 | Link to Comment Martdin
Martdin's picture

Let'er rip!

Fri, 10/26/2012 - 08:52 | Link to Comment machineh
machineh's picture

This was the biggest rise in government spending in 3 years, and only the first contribution by Uncle Sam to its own GDP print since Q2 2010. 

It's called 'get out the vote spending' ... a/k/a 'walking-around money.'

Your tax dollars at work!

Fri, 10/26/2012 - 08:53 | Link to Comment Wakanda
Wakanda's picture

Government consumption:  hollow point bullets for every department

The Second American Revolution, unfolding now in a gerrymandered voting district near you.

Fri, 10/26/2012 - 08:54 | Link to Comment ShortTheUS
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Q3 GDP Estimate Beats Expectations As Government "Consumption" Soars

Keynseian multiplier, BITCHEZ!!!!

 

Fri, 10/26/2012 - 08:53 | Link to Comment Quinvarius
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k+3.  Kaminskied!

Fri, 10/26/2012 - 08:55 | Link to Comment Oldwood
Oldwood's picture

Its just a perspective problem. If we were to look at unemployment in a different way and suggest that a high number actually meant that our economy was doing great because it indicated that we are so prosperous that fewer people actually need to work now, Obama would be our hero! I'm sure with very little effort we can apply this attitude to all off our metrics. We are just looking at things wrong. The high cost of food is good as it helps stem the obesity problem, just like the high cost of fuel incentivizes us to stay at home and not pursue employment. See, its not that hard!

Fri, 10/26/2012 - 08:56 | Link to Comment kaiten
kaiten's picture

Wait for the third revision for real numbers.

Fri, 10/26/2012 - 09:06 | Link to Comment Water Is Wet
Water Is Wet's picture

lol, no GDP number is a real number.  You can't trade it in for cash.  You can't use it as collateral for a loan.  It can't be verified.  It's always just a bullshit number for propagandizing the people.

Fri, 10/26/2012 - 08:56 | Link to Comment Fedaykinx
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*subject to revision

Fri, 10/26/2012 - 08:58 | Link to Comment GolfHatesMe
GolfHatesMe's picture

Does anyone know if all of the states were counted?

Fri, 10/26/2012 - 09:06 | Link to Comment HD
HD's picture

Yes. Some counted twice...

Fri, 10/26/2012 - 09:39 | Link to Comment GeezerGeek
GeezerGeek's picture

Seven should have been counted twice. How else to get to all 57 states?

Fri, 10/26/2012 - 08:58 | Link to Comment kralizec
kralizec's picture

What we really need is a casket boom.

Fri, 10/26/2012 - 09:45 | Link to Comment GeezerGeek
GeezerGeek's picture

What do you think the Independent Payment Advisory Board is for? Palin called them 'death panels'. Kill off enough seniors and both Medicare and Social Security can be declared safe for a few more years. Then the adult kids living in the basement will inherit all the geezers' wealth and go out and blow it, thereby further increasing GDP. Win-win, unless you're on Medicare. I should have been a Congressman for a few terms, because then I'd have an alternative health insurance plan.

Fri, 10/26/2012 - 11:25 | Link to Comment kralizec
kralizec's picture

We can start with these idiots, fill their caskets first, see how that works for them. 

Fri, 10/26/2012 - 09:01 | Link to Comment new game
new game's picture

personal consumption grew 2 percent - yea gas and food to get to work and eat; nice increase that is sure raise everybodies standard of living - this all so bullshit, number fucking game.gotta just laugh it back in the box...

idea to get-er-going; increase gub spend 2 fold and increase gdp growth above cost to finance-organic growth man.

everybody gets a teet, ben prints, gdp soars, iphone 5's for all, dancing with stars in the streets, 2 months paid vaction france style and of universal ocare.

wtf could go wrong?

Fri, 10/26/2012 - 09:01 | Link to Comment azzhatter
azzhatter's picture

All data subject to revision following the coronation

Fri, 10/26/2012 - 09:02 | Link to Comment Zgangsta
Zgangsta's picture

I am shocked that Government Consumption was omitted from the New York Times article on this.  A rare oversight from this fine, unbiased publication.

Fri, 10/26/2012 - 09:02 | Link to Comment vinayjha
vinayjha's picture

magic wand of obama has spelled:

http://www.freefdawatchlist.com

Fri, 10/26/2012 - 09:05 | Link to Comment Awakened Sheeple
Awakened Sheeple's picture

Reality off.

Fri, 10/26/2012 - 09:06 | Link to Comment lolmao500
lolmao500's picture

Personal Consumption: the key driver for real economic growth

Except it's based more and more on CREDIT AND DEBT...

Fri, 10/26/2012 - 09:09 | Link to Comment new game
new game's picture

nice front run today-hammer the fucker down hft back - nice billion dollar day; but not for you cause they don't give a fuck about you - you da mark...

Fri, 10/26/2012 - 09:11 | Link to Comment GubbermintWorker
GubbermintWorker's picture

And this news is driving gold and silver .....up???

Fri, 10/26/2012 - 09:17 | Link to Comment dwdollar
dwdollar's picture

The only people being fooled at this point are the hacks inside the DC scamway. They fool themselves and no one else. Even the legacy media has a hard time swallowing it anymore.

Fri, 10/26/2012 - 09:18 | Link to Comment The Master
The Master's picture

Fear not comrades, this morning rally will be faded and we will close in the red by EOD.  Obama re-election = higher probability that we go over the fiscal cliff.  The machines will catch up to this but it might take them a few hours (or days).

Fri, 10/26/2012 - 09:20 | Link to Comment freedogger
freedogger's picture

they should re-do the song to "Turning Chinease"

 http://www.youtube.com/watch?v=gEmJ-VWPDM4

 

 

 

 

Fri, 10/26/2012 - 09:21 | Link to Comment firstdivision
firstdivision's picture

Wow, this is good news.  I'm sure the number is not manipulated to help the current incompetent...errr incumbent President.

Fri, 10/26/2012 - 09:24 | Link to Comment Grand Supercycle
Grand Supercycle's picture

WARNING BEARS ~ the SPX short squeeze election rally is back along with massive USD selling.

http://trader618.com
http://www.zerohedge.com/news/2012-12-24/market-analysis

Fri, 10/26/2012 - 09:30 | Link to Comment monopoly
monopoly's picture

Sickening. What despots will do to stay in power.

Fri, 10/26/2012 - 09:37 | Link to Comment Wile-E-Coyote
Wile-E-Coyote's picture

Think what another war would do to the GDP....... oh wait

Fri, 10/26/2012 - 09:37 | Link to Comment realtick
realtick's picture

Fixed the chart for ya: http://i47.tinypic.com/2qlxr9j.png

Fri, 10/26/2012 - 09:46 | Link to Comment ebworthen
ebworthen's picture

Must   pump   numbers, must   improve   perception.

Fri, 10/26/2012 - 09:51 | Link to Comment SheepDog-One
SheepDog-One's picture

OMG an 'estimate' beat the 'expectations'? WOW the recovery MUST be real then!

Fri, 10/26/2012 - 09:52 | Link to Comment Yen Cross
Yen Cross's picture

The bond market isn't buying this bull shite!

Fri, 10/26/2012 - 09:56 | Link to Comment alfred b.
alfred b.'s picture

An economist somewhere in the Data Supply Office:

      %8#M +*)049@-?l_%-7%

   Jim, what r u doin'....we're 11 days before an election:  it's time for the 2.0 % print card.   Why is it that I have to remind you each time...loll...and yes of course Jim, we'll be well taken care of.

 

Fri, 10/26/2012 - 10:19 | Link to Comment Mr Pink
Mr Pink's picture

Maybe we should start building some ghost cities

Fri, 10/26/2012 - 10:33 | Link to Comment Tracerfan
Tracerfan's picture

Soviet economic reports were much more truthful than this bovine excrement coming from the Ministry of Lies.

Fri, 10/26/2012 - 11:47 | Link to Comment optimator
optimator's picture

Personal consumption will go up 10% when prices go up 20%.  Add to that folks that are buying things before the price goes up. Bumblenanke printing is working.

Fri, 10/26/2012 - 12:01 | Link to Comment Bansters-in-my-...
Bansters-in-my- feces's picture

Delusional FuckTards....

What else can I say..?

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