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Preliminary Q4 GDP Declines To 3.2% As Expected; Final 2013 GDP 1.9%, Down From 2.8% In 2012

Tyler Durden's picture





 

After the blistering final Q3 GDP print of 4.1% (to be revised far lower eventually), the preliminary Q4 GDP number had only one way to go, down - and sure enough it dropped to the expected 3.2% (well below Joe LaVorgna's 4.0% forecast), capping 2013 GDPat 1.9%, down solidly from the 2.8% growth recorded in 2012. "Assume a recovery..."

The good news: the composition of the preliminary Q4 GDP number was better, with inventories only accounting for 0.42% of the final 3.22% print, compared to 1.67% previously. In fact, for the first time since Q1, Personal Consumption was responsible for more than half of GDP growth, generating 2.26% of the annualized growth compared to 1.36% in Q3.Still on a quarterly basis, Personal Consumption of 3.3% missed expectations of a 3.7% growth, up from 2.0% - did the consumption surge already roll over before the quarter ended? Why yes, if one looks at abysmal holiday retail sales numbers.

The key contributors to consumption growth were Services, and specifically a jump in spending on housing and utilities (from -0.31% to 0.14%), as well as Food Services and Accommodations which rose from 0.02% to 0.43% annualized. Which was to be expected as inventory is being absorbed by consumption. The question is how much longer can consumers keep this behavior up with collapsing purchasing power.

The bad news, and here all "CapEx is growing" fans please look away, Fixed Investment tumbled from 0.89% to just 0.14% annualized, as investment across the board dipped but mostly in non-residential structures (down -0.03% from 0.35%) and a collapse in residential fixed investment from 0.31% to -0.32%.

Finally, net trade contributed a whopping 1.33% in GDP, the most since the 2.39% increase in Q2 2009. How much longer can the US continue boosting its GDP on the back of the shale boom, and declining imports, remains to be seen. However, just like the inventory build up now has to be soaked up, so the net trade boost is about to become a drag on growth, precisely in time for the consumer to also pull back. In other words, enjoy the Q4 GDP surge - it won't last into 2014.

Source: BEA

 


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Thu, 01/30/2014 - 09:57 | Link to Comment buzzsaw99
buzzsaw99's picture

revenue is up and the deficit is down and you only get mugged if you go downtown [/country boy can survive]

Thu, 01/30/2014 - 09:58 | Link to Comment idea_hamster
idea_hamster's picture

Gold SPANK DOWN!

I could set my watch by it....

Thu, 01/30/2014 - 10:02 | Link to Comment WarriorClass
WarriorClass's picture

"The question is how much longer can consumers keep this behavior up with collapsing purchasing power.

The bad news, and here all "CapEx is growing" fans please look away, Fixed Investment tumbled from 0.89% to just 0.14% annualized, as investment across the board dipped but mostly in non-residential structures (down -0.03% from 0.35%) and a collapse in residential fixed investment from 0.31% to -0.32%."

When you know that consumer purchasing power is collapsing, why would any business increase investment in more production?

http://americandictators.blogspot.com/2014/01/economic-studies-even-you-...

Thu, 01/30/2014 - 13:45 | Link to Comment SDShack
SDShack's picture

Yep. In Q4, 0zer0care was just sticker shock. Now 0zer0care is changing to wallet shock. The only way consumer purchasing power will increase in that environment is if people stop paying any HC premiums, which will happen when their employer plans are cancelled this year as employers are forced to cut costs once again... courtesy of 0zer0care.

Thu, 01/30/2014 - 10:13 | Link to Comment agent default
agent default's picture

Hey Tyler, post that COMEX reserves chart one more time.  Some people here need cheering up today.

Thu, 01/30/2014 - 10:27 | Link to Comment I Am Not a Copp...
I Am Not a Copper Top's picture

It was at the top of the down trend line, gonna take a while to get through it.  Relax and be thankful you will get another chance to get it cheaper.

Thu, 01/30/2014 - 10:33 | Link to Comment Offthebeach
Offthebeach's picture

Strip out of the annual % 1.8 GDP all the fracking boom and we are negitive.
Pull out Fed monthly bond buying and Fedgov Kenyan stimulants. ....

Thu, 01/30/2014 - 12:13 | Link to Comment imapopulistnow
imapopulistnow's picture

Fracking is what saved the economy from slipping into a depression.

Thu, 01/30/2014 - 12:21 | Link to Comment moneybots
moneybots's picture

"Fracking is what saved the economy from slipping into a depression."

 

The economy IS in a depression.

Thu, 01/30/2014 - 09:58 | Link to Comment syntaxterror
syntaxterror's picture

Face it, your Central Planners suck at their jobs.

Thu, 01/30/2014 - 09:58 | Link to Comment Sudden Debt
Sudden Debt's picture

Why not add prostitution and drugdealing to the GDP? That should do it...

Thu, 01/30/2014 - 10:10 | Link to Comment JustObserving
JustObserving's picture

Isn't that the stock and trade of Wall Street?  Selling yourself for the drug called money.

Thu, 01/30/2014 - 10:00 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

Businesses are "stockpiling" inventory.  Must be prepping for the collapse.

Thu, 01/30/2014 - 10:02 | Link to Comment dobermangang
dobermangang's picture

Another average economic year under Obama.  Worse than last year, but better than next year... so average.

Thu, 01/30/2014 - 10:42 | Link to Comment ejmoosa
ejmoosa's picture

You could not have stated it any better.

Thu, 01/30/2014 - 10:02 | Link to Comment gookempucky
gookempucky's picture

every flush of the toilet is in that equation

Thu, 01/30/2014 - 10:04 | Link to Comment Fiat Burner
Fiat Burner's picture

Marketwatch: "U.S. sees second straight quarter of rapid growth."    What a fucking joke.

Thu, 01/30/2014 - 10:03 | Link to Comment IridiumRebel
IridiumRebel's picture

I get tweets for news now and if you were to see how the media has been fawning over this number it's quite hilarious.

Thu, 01/30/2014 - 10:08 | Link to Comment Ness.
Ness.'s picture

'Real' final sales up 1.9% in 2013 vs 2.5% in 2012.  Going forward in reverse.

Thu, 01/30/2014 - 12:52 | Link to Comment pavman
pavman's picture

You know, you add those two numbers together and we're doing 4.4% better than in 2011.  If that ain't progress...

Thu, 01/30/2014 - 10:10 | Link to Comment papaswamp
papaswamp's picture

So how much was pumped into the economy in 2013..... and we get 1.9%.... a decline from 2012.

Thu, 01/30/2014 - 10:09 | Link to Comment starman
starman's picture

Is 75% off a discount or a deflation ?

Thu, 01/30/2014 - 10:42 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

Yes.

Thu, 01/30/2014 - 12:53 | Link to Comment pavman
pavman's picture

Speaking of 75% off...whatever hadppened to Zayres?!

Thu, 01/30/2014 - 10:09 | Link to Comment BullyBearish
BullyBearish's picture

Short-squeeze fueled rally today, plus PoMO is baaaaaaaaaaaaaaaaaaack with ~$5B tomorrow...

Thu, 01/30/2014 - 10:14 | Link to Comment pachanguero
pachanguero's picture

here in Thailand the gold shops are full of Thai's bailing on the Baht and the bar girls are getting more humble.....

I'm pretty happy here waiting for the real meltdown called China!

NWO war to follow!

 

 

Thu, 01/30/2014 - 10:15 | Link to Comment olenumbersix
olenumbersix's picture

Well a bright spot to all the horse shit is gold falling annnnnnddd since I am a buyer or the yellow stuff I guess I'm off to the coin shop <thanks Ben>

Thu, 01/30/2014 - 10:31 | Link to Comment highwaytoserfdom
highwaytoserfdom's picture

I am not a particularly religious man but really really try to hedge my bets Joe LaVorgna appears not  follow this path. Volker suggest using John Williams...     Joe that's  ~  -2%....  Isn't  fiat trust?  latin fiat ("let it become", "let it be done", "it shall be"

http://www.shadowstats.com/alternate_data/gross-domestic-product-charts

 

 

There are six things that the LORD strongly dislikes, seven that are an abomination to him: haughty eyes, a lying tongue, and hands that shed innocent blood, a heart that devises wicked plans, feet that make haste to run to evil, a false witness who breathes out lies, and one who sows discord among brothers.

Proverbs 6:16–19
Thu, 01/30/2014 - 11:39 | Link to Comment Colonel Klink
Colonel Klink's picture

Wrong book, the banksters don't read that one!

Thu, 01/30/2014 - 12:21 | Link to Comment moneybots
moneybots's picture

"a false witness who breathes out lies"

 

They calll it real GDP when it isn't real at all.  Debt has exceeded GDP for decades, thus there is no real growth.

Thu, 01/30/2014 - 10:47 | Link to Comment MickV
MickV's picture

If R&D and Government spending were not counted as "GDP" then GDP would be negative.

Thu, 01/30/2014 - 11:08 | Link to Comment syntaxterror
syntaxterror's picture

1% GPD growth in 2014 should correlate to at least a 15% S&P 500 bump.

Thu, 01/30/2014 - 11:16 | Link to Comment moneybots
moneybots's picture

"After the blistering final Q3 GDP print of 4.1% (to be revised far lower eventually)"

 

You mean the fake GDP of 4.1%, with the fake intanglibles added to artificially inflate the number?  What is the number after debt is subtracted- negative?

Thu, 01/30/2014 - 11:33 | Link to Comment Theo P Neustic
Theo P Neustic's picture

YOU: Why yes, if one looks at abysmal holiday retail sales numbers.LA TIMES:Good sales over the holiday season helped boost economic growth in the fourth quarter.So which is it?  It couldn't be that the media is the cheerleader? “Think of the press as a great keyboard on which the government can play.”-Joesph Gobbels

 

Thu, 01/30/2014 - 12:06 | Link to Comment BullyBearish
BullyBearish's picture

It never fails, the worse the news the more the market moves...UP

Thu, 01/30/2014 - 19:22 | Link to Comment hotrod
hotrod's picture

Isn't GDP INFLATED now due to the new calculations started last summer>????????  Seems GDP numbers are as distorted as inflaton, unemployment, housing etc. etc.   

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