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US Economy Shrank By 1% In The First Quarter: First Contraction Since 2011
Weather 1 - Quantitative Easing 0.
Spot on the chart below just how high the culmination of over $1 trillion in QE3 proceeds "pushed" the US economy.
Joking aside, while the realization that nobody can fight the Fed except a cold weather front, is quite profound, in the first quarter GDP "grew" by a revised -1.0%, down from the +0.1% first estimate, and well below the -0.5% expected, confirming that while economists may suck as economists, they are absolutely horrible as weathermen. This was the worst print since the -1.3% recorded in Q1 2011.
Bottom line: for whatever reason, in Q1 the US economy contracted not only for the first time in three years, but at the fastest pace since Q1 of 2011. It probably snowed then too.
The breakdown by components is as follows:
Some highlights:
- Personal consumption was largely unchanged at 2.09% from 2.04% in the first estimate and down from 2.22% in Q4. Considering the US consumer savings rate has tumbled to post crisis lows at the end of Q1, don't expect much upside from this number.
- Fixed investment also was largely unchanged, subtracting another 0.36% from growth, a little less than the -0.44% in the first estimate and well below the 0.43% contribution in Q4.
- Net trade, or the combination of exports and imports, declined from
-0.83% to -0.95%, far below the positive boost of 0.99% in Q4. - The biggest hit was in the change in private inventories, which tumbled from -0.57% in the first revision to a whopping -1.62%: the biggest contraction in the series since the revised -2.0% print recorded in Q4 2012.
- Finally, government subtracted another -0.15% from Q1 growth, more than the -0.09% initially expected.
So there you have the priced to perfection New Normal growth (inclusive of "harsh weather", which obviously has to be excluded for non-GAAP GDP purposes), which also now means that in the rest of the year quarterly GDP miraculously has to grow at just shy of 5% in the second half for the Fed to hit the "central tendency" target of 2.8%-3.0%.
And now we await for stocks to soar on this latest empirical proof that central planning does not work for anyone but the 1%.
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I fear for the future of this country. It has been very windy and rainy here lately. I fear our economy is doomed!
The Bummer to Michelle
" Honey we shrunk the GDPee"
It's time to RALLY! Today should blow the lid off yesterday's high, BUY BUY BUY!
"Official" re-definition of GDP in 3,2,1...
The "USS Titanic" is listing further...
The Captain on 1MC (ship wide PA): "Ladies and Gentlemen we are very sorry for the inconvenience, however we can not control the weather, also we have intelligence that there may be terrorists on board. Return to your cabins immediately. Our stewards will be doing a headcount and securing you and your families in your cabin for your safety."
Captain whispers to First Officer: "Once the 99% are locked in their cabins, secure the passenger gangways below 1% class. Then assign security detachments to each gangway. Tell them to use whatever means necessary, including lethal force to keep the 99% down there."
First Officer to the Captain: "Sir, what about the 1%?"
Captain to the First Officer: "Once the 99% are secured, escort the 1% to the life boats."
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I hate shrinkage.
Inflate it. Then tell everyone threre is no inflation...problem fixed!
By Jim Quinn at the Burning Platform
The American retail industry is emitting an unmistakable wheezing sound as a long slow painful death approaches. Stockman's Corner http://davidstockmanscontracorner.com/bad-trend-breaking-retail-results-not-better-than-expected-but-worse-than-ever/
Bad news?
So that's a buy signal right?
I think it is getting near helicopter time....got to get consumers spending...nothing like free money...just look at the banks and stawks.
What do we know?
The USA is a Oligarchy-Check!
Wealth is being centralized into the hands of a small few-Check!
The Media is being radically consolidated by the Wealthy few-Check!
The Solution?:
AMERICA IS THE GWEATEST COUNTRY IN THE WORLD!
AMERICANS ARE EXCEPTIONAL.
Keep repeating this until things get better.
(And don't cut in line at the Welfare Office.)
You can be exceptional too.
You're not working hard enough.
Man-up, sayeth the ketchup man.
What happens to the equity market after the elections in November?
Anyone planning to short this beast after the elections?
trillions of fake economy evaporating with those printed dollars!
Here is what is even worse.
Corporate profits after taxes plunged by 6.78% in the first quarter(year over year). That is the worse quarter since the fourth quarter of 2008.
The only thing keeping the stink of this economy at bay is the corporations buying up their own stock as fast as they can.
These numbers also raise the question on the employment numbers.
Who is hiring with plunging profits on the bottom line?
GREEN SHOOTS BABY!
They obviously forgot to add the Prostitutes and booming Drug profits to the ledger.
Quick!!! to the obfusticator... Get that bucket of bullshit spewing out now, Race!!! NOW!!!
Bad news is good news. Of course. Because QE infinity will work so much better than QE1, QE2, and QE3.
But then why the FUCK are 10 year treasuries at 2.41%?!?! This doesn't make sense.
Plunging discount rates combined with falling equities will create a multi trillion dollar pension problem. No home equity, trillion dollar student loans, multi trillion dollar in unfunded pension liabilites, up next...direct purchase of US equities by the FED. At somepoint everything is toast...but starting to think it may not be for years...
Comrades! What are you doing here on this thread? You should be focusing your concern and attention instead on Brad Pitt, the traitor Edward Snowden and with gubbermit efforts to reform the VA Health Care System. Haven't you been watching TEEVEE???
I bought an Apple TV just so I could get RT news and others. RT contains propaganda but it isn't arm wrestling over the flag, bible, abortion, and Hollyward. This shit in the USA is pabulum and tag team crap. Has nyone seen a Republican anywhere around? Where are they? AWOL or drugs? Opposition party, my ass.
Typical Headline:
S&P hits record on growth bets despite GDP contractionBloomberg already saying that it's a one time deal because the recent retail data shows the economy is doing great. I don't know what the hell the author of that BBG article was smoking, but I'd like some.
Value is determined by the FED.
Make it work.
Yes, master.
And this is with all the Fed's QE.
LOL, the Fed's money printing isn't working. It's just raising asset prices and accelerating the retraction of 99%.
Higher rents, food, autos,etc. The Fed is already at zero. You can't make a dead horse drink.
In the meantime businesses are bringing in lower cost labor.
Noted economist George Costanza has confirmed the shrinkage after a swim.
Yeah but Apple did good.
Time to change the GDP calculations again! Let's get 'er to 10% growth by just adjusting a few things here and there.
Shrinked? Shrank? Shrunk?
Funny but there is no way out of this uncontrolled debt to infinity to keep some unsustainable economic system going which needs more debt that will not be worth shit unless more debt is created and on and on. If/when the bottom falls out all pension funds get trammeled along with all currencies and the price of everything goes moon shot. except your assets which collapse like burned out methlab. no jobs no money no assets. watch your world disintegrate to shit