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Final Q4 2013 GDP Misses Expectations, Rises 2.6% Annualized - Full Breakdown

Tyler Durden's picture




 

And so the various estimates of Q4 GDP have made an almost full circle: starting at 3.22% in the first forecast, plunging to 2.38% in the second, and finally settling at 2.63%, a miss from the expected 2.7%. This is down from 4.1% recorded in Q3 which however as everyone knows by now was purely due to a unprecedented, record inventory build up.

In terms of components, Personal Consumption was the silver lining in this latest economic miss, rising at a 3.3% pace higher than the expected 2.7%. This was driven by greater than expected spending on health and financial services. Yes - higher health insUrance costs are somehow a boost to GDP. How this offsets spending on other end goods and services with a finite and declining disposable income stream remains to be seen.

In terms of the actual contribution, Personal Consumption was 2.22%, above 1.73% in the prior revision, offsetting yet another decline in the contribution from Capex, i.e. Fixed Investment, which dropped from +0.58% to +0.43%. By now, however, even Larry Fink has figured out that as long as the Fed is around, there can be no true CapEx growth. Which means it is all about boosting Personal Consumption through the "Russell 200,000" wealth effect channel.

The full breakdown of quarterly GDP is shown below.

 

But don't worry: those hoping Q1 will be better, don't hold your breath. This is what's coming. You know - "snow in the winter" and all that.

 

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Thu, 03/27/2014 - 08:54 | 4597992 firstdivision
firstdivision's picture

I love how somehow (through the magic of math manipulation I bet), personal comsumption stays positive. Must be all those people forced into buying health insurance.

Thu, 03/27/2014 - 08:56 | 4598001 playnstocks
playnstocks's picture

I thought health insurance is free now!

Thu, 03/27/2014 - 08:58 | 4598012 firstdivision
firstdivision's picture

No, you're just given a free phone to call for an ambulance or your baby's momma.  Which ever you prefer to kill you quicker.

Thu, 03/27/2014 - 09:11 | 4598055 negative rates
negative rates's picture

It still is, but only if you buy an apple a day.

Thu, 03/27/2014 - 09:28 | 4598107 firstdivision
firstdivision's picture

I bet you the BLS excel model has the formula IIF(Sum(Personal Consumption)<0,Sum(PersonalConsumption)*(-1),Sum(PersonalConsumption)

Thu, 03/27/2014 - 08:54 | 4597993 The wheels on t...
The wheels on the bus are going to fall off's picture

its going to be a rocky ride!

Thu, 03/27/2014 - 08:57 | 4598003 NoDebt
NoDebt's picture

"higher health insUrance costs are somehow a boost to GDP"

The magic of central planning.  Once all spending is directly controlled by the government or mandated by the government, you can make GDP whatever you want it to be.

Which is why GDP is increasingly meaningless as a measure of "how good we're doing".

Thu, 03/27/2014 - 08:58 | 4598013 redd_green
redd_green's picture

They have been cooking the GDP, Inflation and Unemployment numbers for decades and decades.

Thu, 03/27/2014 - 09:04 | 4598031 tarsubil
tarsubil's picture

Hmm, you say conditions are getting worse all around you? That's not what the numbers say. Don't you want to be a team player? We're all in it together.

https://www.youtube.com/watch?v=aErDEFpoD_0

Thu, 03/27/2014 - 08:56 | 4598005 redd_green
redd_green's picture

The crookedy, crooked crooks have manipulated and twisted the formulas, and found a way to push inflation into the GDP numbers.   Anyone in their right mind believe that the USA had anything like positive GDP growth has consumed too many psychotropic anti depressants.    These BLS PhD's are good, very good at cooking the books.    Yes, we had 2.6% GDP growth (yeaahh), all praise fearless leaders, and 1% inflation (Weehawww),  thank God we have Republicans and Democrats runnig the show!    More like 13% inflation and  negative 2% gdp growth.  

Thu, 03/27/2014 - 09:19 | 4598080 cossack55
cossack55's picture

Was Q3 where they added the $500 billion for "thinking good thoughts"  or was it "thinking about ideas"?  Some stupid shit like that.

Thu, 03/27/2014 - 08:58 | 4598009 Rakshas
Rakshas's picture

Geez man, how do you miss lower than snakeshit expectations???

Thu, 03/27/2014 - 09:03 | 4598027 ebworthen
ebworthen's picture

"This was driven by greater than expected spending on health and financial services."

So getting ass raped by insurance companies and banks/brokers helps GDP?

Who'da thunk it?  Pardon, have to staunch some bleeding...

Thu, 03/27/2014 - 09:11 | 4598057 22winmag
22winmag's picture

What is GDP except for a yardstick of waste, inefficiency, and corruption?

 

It's far from an accurate figure of anything meaningful.

Thu, 03/27/2014 - 10:08 | 4598258 ejmoosa
ejmoosa's picture

It is a waste.

 

The key to the economy is in a different section of the release.  Corporate profits is effectively the blood pressure of the economy. GDP is the weight.

 

And for the last four quarters, corporate profit growth before taxes is up a mere 4.61% annually.  That is far below the threshold needed to expand the economy.

 

The US economy will continue to right-size until we achieve growth rates well above the 7-8% range.

Thu, 03/27/2014 - 09:22 | 4598091 new game
new game's picture

and the illusion goes on. keep the faith in the almighty dollar, keep the faith, cause what ya gonna do if you are broke?

no mun, no fun...id kill for dat.

Thu, 03/27/2014 - 11:14 | 4598580 Colonel Klink
Colonel Klink's picture

Now pull out the government largess from the eCONomy and tell me what the numbers are.  We've been in a recession if not full on depression for 5 years running.

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