Final Q1 GDP Is A Huge Miss, Personal Consumption Craters

Tyler Durden's picture

Remember the key component of the Fed's baffle with BS strategy: namely "baffle with BS."

Following yesterday's epic trifecta of economic growth when durables, housing and confidence data all slammed expectations, it was up to GDP to be the bad cop. Sure enough, following the already disappointing first Q1 GDP revision which revised the preliminary 2.5% number to 2.4%, today economists were expecting an unchanged print. Instead they got a crash to 1.77%. And on what? Why the collapsing US consumer whose true colors have finally come out in the final Q1 GDP revision: responsible for 2.40% of the GDP print in the first revision, Personal Consumption Expenditures tumbled to just 1.83% of GDP. In absolute terms, PCE plunged from 3.4% to 2.6% on expectations of 3.4%. There goes the buying power of the overlevered, undersaved US consumer.

And perhaps just as disturbing was that Fixed Investment, i.e. CapEx, cratered to only 0.39% of the GDP print, down from 0.53% in the first revision, and 0.52% in the prelim. This was the lowest Fixed Investment number since Q3 of 2012.What is worst, is that non-residential fixed investment crashed from 2.2% to 0.4%. In other words, growth CapEx is now officially dead.

Dont worry though: 4 years of QE may not have led to sustainable 2%+ growth, but another 4 years certainly will. Or maybe another 40. At this point does anyone even care?

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thismarketisrigged's picture

and futures go higher on this terrible news.

 

makes total sense.

 

at least i got to witness a santelli rant vs all the fools on cnbc this morning. made it worth it.

GetZeeGold's picture

 

 

Thanks for the warning CNBC.

 

Defcon 1.......someone find Cramer.

WakeUpPeeeeeople's picture

""If you can't dazzle them brilliance then baffle them with bullshit.""

 

Used to see a lot of that in the military and now seems to have found its way into the civil service sector.

SilverDosed's picture

Good job using the top post to shill for santelli some more. Can we please ban this cnbc shilling fuckstick? Every post he makes is fluffing Santelli and he's got a few other names as well.

Stuart's picture

What kind of monkeys do they have working over there calculating these stats.  How can they be off on exports by so much, let alone getting the direction 100% wrong...from adding to GDP in the 1st #s to ending up as a negative to GDP.   I know inflation goes into it but in turn, how can they be so off on that too.  The US reporting is that of a Banana republic.  Add to this spying without judicial review on your own people and then accusing the other guy of espionate...jesus... RIP Credibility.

Jdog's picture

Cramer said "revised crap GDP number? who cares, that is in the rear view mirror" lol ok ok I finally caught up the scam, instead of reporting real economic data, they just made up a fake number, then wait 2 months later and revise it down to the real crap number, then everything is fine. who cares it's in the past. lol I got it!

ekm's picture

Dow cannot drop

It can only crater

DormRoom's picture

HOw can GDP so low, given the wealth effect, when equities have hit nominal all time highs, and so many asset classes are in bubbles.  /sarc.

 

Blowing bubble doesn't help the real producing economy, instead it props, and extends the shadow economy in its tranformation of the real economy to a rentier economy.

CheapBastard's picture

Irony (from the Ancient Greek ???????? eir?neía, meaning dissimulation or feigned ignorance),  in its broadest sense, is a rhetorical device, literary technique, or event characterized by an incongruity, or contrast, between reality (what is) and appearance (what seems to be).

 

 

http://en.wikipedia.org/wiki/Irony

Stuart's picture

As James Rickards recently pointed out the FOMC forecasting prowess is amongst the worst of any body.   This GDP print confirms that.  Why anyone believes the FOMC, there's a sucker born every day.  

Meat Hammer's picture

Bulls walk up the stairs.

Bears jump out of windows.

xtop23's picture

May 2011 I didn't see Yogi reaching for the window latches....... lotta horns though.

Hell, I even looked at the double-paned glass twice.

spastic_colon's picture

draghi, front run tomorrow POMO, bad GDP, end of quarter etc etc all adds up to ES 1625 by friday - bottom of november channel

SheepDog-One's picture

Gold spraypainted turds is what it's all about now.

aint no fortunate son's picture

and dow opens up 120... just because

SilverDosed's picture

Still shilling for santelli? GTFO of here.

 

xtop23's picture

And that's with R&D etc credits bolstering the tally of GDP.

No problem..... they'll just revamp the revamp of the revamp's revamp in tabulating revamps.

ekm's picture

propaganda and only propaganda

 

Economy contracted probably by 2-3%

LawsofPhysics's picture

Correct.  Everyone needs to be in capital preservation mode again.  Book profits and come back after the kabuki theater is done.  Remember, the U.S. CONgress needs to fund those liabilites and rates are rising.  

We all know there are no "markets", but there will be real consequences as governments must fund liabilities or face revolutions.

Hedge accordingly.

JustObserving's picture

CPI is understated by 3 to 4%.  Hence growth is overstated by 3 to 4%.  This has been going on for more than a decade now.  Real US GDP is probably about $10 trillion.  On July 1, US GDP jumps by $500 billion due to addition of intangibles.

LawsofPhysics's picture

"Thank you, mark to fantasy accounting!" - FIXED, fuck all the paper-pushers and their political puppets!

fonzannoon's picture

translation - yields must drop

Clowns on Acid's picture

translation - QE will be dis- tapered....and yields will drop...for the moment

LawsofPhysics's picture

wait for it fonz.  We all know this to be true, but it will not happen while so many are expecting it to or so many are positioned to profit from such a move.  I say bonds keep crashing until August/september, maybe even longer.

fonzannoon's picture

agreed, the trend is higher. The next short term move is lower yields. At which point I have a feeling a lot of people will be selling into it.

disabledvet's picture

there are a lot of obvious factors for treasury selling right now...none of them having to do with the taper. Japan is in total liquidation mode right now. the yen is tanking again..."all in on JGB's." that means selling treasuries. china is interesting because if they've simply stopped lending period that says to me they're actually going to keep buying treasuries here. obviously i wouldn't be touching the Yuan with a ten foot pole but "at least they can afford to buy treasuries in the first place." not so Brazil, India, South Africa, Venezuela, Canada, Australia, Mexico...i mean this list is getting real long right now. so sure...interest rates have explode higher...but that's for EVERYONE. i find myself asking actually "is this the way forward? bankrupting every Government on earth?" seems rather odd if true. we can't grow the economy at zero percent financing so "trying it at six percent will work way better"? really? anywho equities are up. with everything else getting slammed including gold and silver. mines are getting shuttered. charge offs are off the charts now. "and still they can't make money." bankruptcies sound imminent in the materials space. that sounds very bullish for railroads to me. i'd be a buyer. http://seekingalpha.com/symbol/ksu?source=search_general&s=ksu

new game's picture

disa... says smart money in cash and waiting patiently-true?

Meat Hammer's picture

Many of my friends are laughing at me and wondering why I bought gold at $1,700/oz when stawks are doing so well.  They're also wondering why I go into a maniacal cackle when they laugh.  Suckers.

transaccountin's picture

so what was gdp without the money printing?

xtop23's picture

Shhhh, the administration is watching.

That is the word that must not be spoken.

Better off screaming, "Voldemort!"

the not so mighty maximiza's picture

does this prove the QE programe failed offically?

Bobbyrib's picture

Only to reasonable people. To the Fed, it means more QE.

disabledvet's picture

well...we're going to have it your now. does 40% unemployment without QE sound like an improvement? how about 25% interest rate on that credit card? oh, and that house you though was worth 400,000? it's worth 4,000 bucks now! rah! rah! GO TAPER!

xtop23's picture

What kills me is all of that crap about the sequester.

OMG if these cuts go into effect it'll be Aramageddon..... the bond market blew that "savings" up in remarkably short order.

shovelhead's picture

"Proof?...Haha...Proof?

"We doan need no steenking proof."

The Axe's picture

The ten year      sorry      I should have        ouch

slaughterer's picture

Bad is still good. 

Cpl Hicks's picture

And Barry is still the One.

ThunderingTurd's picture

Wake the fuck up America!!!!!!! We have nothing to show for the burden government has placed on our shoulders and the shoulders of generations to come. WAKE THE FUCK UP!!!!!!

GMadScientist's picture

Not true! We got drones, drugs for seniors, and a whole bunch of computers to spy on you, Sparky!

SheepDog-One's picture

AH...well that's the marrow of it right there....95%+ of americans deserve exactly what's coming to them and in a way I'm cheering on the Fed! MOAR MOAR!!

salimmk's picture

Americans are getting pissed off, I can confirm. About time they start caring about their own lives.

Wile-E-Coyote's picture

Wake the fuck up America!!!!!!! We have nothing to show for the burden government has placed on our shoulders and the shoulders of generations to come. WAKE THE FUCK UP!!!!!!

You have just been allocated bed number 15734 in FEMA re-education camp Alpha. Your booking courtesy of NSA holidays; have a nice day!

ArkansasAngie's picture

Government transfer payment will save the day. We don't need no stinking jobs with uncle Obama there to save arses ... Including the banksters'

Obchelli's picture

So that shows they can't even make preliminary calculations 2.4% what was that? almost 50% higher number then real one.... But who cares when they print 2.4% it's great market rallies . Now 1.8% is very timely means MOAR QE - market rallies did they box shorts or what? And one idiot on CNBC is talking now how great things are... 

Tortfeasor's picture

When even your imaginary girlfriend is a sow, you've got problems.

GMadScientist's picture

Could be worse; could be floating in a river.