GDP Disaster: Final Q1 GDP Crashes To -2.9%, Lowest Since 2009, Far Below The Worst Expectations

Tyler Durden's picture

Remember when in January 2014, Q1 GDP was expected to rise 2.6%? Well, here comes the final Q1 GDP revision and it's a doozy: at -2.9%, far below the -1.8% expected and well below the -1.0% second revision, it is an absolute disaster, and is the worst print since Q1 2009.

And while a bad GDP print was largely expected, the driver wasn't: personal consumption expenditures somehow crashed from 3.1% to just 1.0%, far below the 2.4% expected, meaning that all hope of a consumer recovery is dead. Finally, as a reminder, US GDP has never fallen more than 1.5% except during or just before an NBER-defined recession since quarterly GDP records began in 1947. Good luck department of truth propaganda machine, because even assuming 3% growth every other quarter in 2014 means 2014 GDP will be 1.5% at best!

GDP long-term:

And GDP broken down by components:

For some context, this is a 6 standard deviation miss - as economists were striongly biased to the upside beat...


Do you believe in miracles?


Source: Dept of Commerce

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Shocker's picture

Is this really a shocker?

Current Job Situation:


Chris Jusset's picture



Perhaps it's time that the USA goes back to free-market capitalism rather than a Fed-controlled, centrally planned economy?

fonzannoon's picture

Looks like Japan stick the "Mission accomplished" sign in the ground and moved on like the fed has. GDP be damned.


Unless companies unleash record cash and increase salaries and capital spending, the danger is that Abenomics ends up hurting purchasing power without reviving the economy.

GetZeeGold's picture



I'll take Obamacare and 29.5 hr/wk jobs for a thousand Alex.

Chris Jusset's picture

The current massive misallocation of capital caused by ZIRP, QE, and bailouts MUST END ...

GetZeeGold's picture



We really need to rename the Washington Redskins......gotta get on that!

Headbanger's picture

Can you say "massive liquidity crisis dead ahead the Fed can't fix!"?



Serfs Up's picture

Try to act surprised when the 2Q "beat by a mile" stawk relief rally happens, even though the combined 1Q + 2Q GDP prints will = zero.

SWRichmond's picture

And with real inflation running at about 10%, what is real (inflation-adjusted) GDP actually doing?

Muddy1's picture

My stacks are a bit shinier this morning.

1000 splendid suns's picture

So, does this new number include government spending and interest on the debt?...

Fredo Corleone's picture

One brief comment regarding this morning's GDP number:

"Lavorgna !"

Killer the Buzzard's picture

Fredo:  You're smaaaart.  Not dumb... like everybody says.

dontgoforit's picture

Good God, people!  They are winning.  The communists have taken us over without firing a shot.  Cloward-Piven in full swing and the obamakrieg is running us down by proxy.  We are most thoroughly screwed.

Oh regional Indian's picture

Slightly OT, but really it's all related. Libertarians are going to go a little apoplectic seeign this video:

Obchelli's picture

Yahoo finance page didn't even mention this... It passed as non event. Imagine if GDP beat by 0.1% this would be all over the place how great economy is doing and Dow would be up 200 points (It still may even with this crappy news - you never know)

MillionDollarBogus_'s picture

DOW is up 22 points.

nothing to see here.

Move on...

philipat's picture

This really isn't rocket science. The US economy is comprised 70% consumer consumption, so for the economy to grow requires an increase in consumption. With real net disposable income falling, that isn't going to happen.

Save_America1st's picture

obviously they forgot to include prostitution and drugs into the new GDP.  And let's not forget to add in the obvious huge boost we're going to get with 30 million illegal aliens waltzing across the southern border.  What could possibly go wrong?

sixsigma cygnusatratus's picture

Six sigma miss?  Hmmm, I hope Mrs. Sixsigma isn't reading this...

disabledvet's picture

Apparently there still isn't enough prostitution, drug dealing and illegal emigrating then!

I have to laugh at the clowns calling GDP a "backward looking indicator." REALLY? "What if the next print is down 5.3%?" Is that "backward" enough for ya?!!!

"This is the sound of entire polity collapsing." The good news is that as with Hitler "the Manichean Struggle only ends with them."

The rest of us...can move along now.

daveO's picture

Actually, we're in the late stages of decline. Like the USSR in the 1980's. They were a hollowed out shell of their former selves. Yet, they were held up as a formidable adversary by the same media that now tells us BHO is the second coming.

NegativelyBiasedCredulity's picture

It's the weather according to Lavorgna, he's doubling down: 4% Q2 GDP!!!

"This makes us confident that a substantial portion of the extraordinary decline in Q1 was some combination of weather and seasonal factor adjustment issues.Despite the horrendous Q1 showing, we remain upbeat that current quarter growthwill top 4%, and that the rest of the year will show 3%-plus growth"


Spigot's picture

Yes. But also note that understating inflation directly inflates GDP. IE - it's far worse than -2.9%.

My business has been feeling it this year. Retailers are not reordering much and new retailers are reluctant to order. Web site sales are far below last year. I live rural near a modest size city of 75k pop. When I am outside there is an erie silence ... very little noise is being generated. Road tTraffic is very light. It's almost as if everyone gave up and went home.

Joe Davola's picture

At least no one's proposing an increase to gas taxes.

Oh wait.

TeamDepends's picture

Exactly, and it's not like there are hordes of unwashed underwearless masses invading from the south either.

BraveSirRobin's picture

Thank God for Obama. He so expertly guides the economy so that we can have a 2.9% contraction and yet weekly unemployment claims fell, as did the unemployment rate, while the economy created over 200,000 jobs per month. No one has ever done that before. He is truly God's gift to humanity... and so hunky and dreamy, too. did you see those photos of him lifting weights??? I'm sure it gave Putin a Boehner.

mkkby's picture

Don't worry.  All those politically aware jobless people are about to rise up and hang the banksters, burn down the NSA and demand the borders be closed to H1-Bs and illegals. 

Wait a minute... what did you say was on TV?

LostandFound's picture

The typical consumer is tapped out, this isnt going to change and will only get worse as people desperately try and keep out of debt

Things that go bump's picture

My little web business has gone south. Granted, its seasonal (Christmas), and this is my slow time, but I usually get at least some orders throughout the spring and summer. Last year was bad, but this year I'm hardly even getting any hits. Thank God I don't have any real expenditures to speak of or I'd be out of business.

Abi Normal's picture

Now, now people....what do you expect them to do...tell us the ship is gonna sink (we're gonna crash)?  If they did that, it would start a real crash right runs, holiday, etc

I just wish there was something that could be done, but what?  Even if we STOPPED all spending, this thing is going down...

Just a matter of time...strap on the Chinese nose guards, you will need them.

I agree, for once, with all the comments here so far...

Squid Viscous's picture

maybe it's the KISS memorabilia, the idiots that thought they were a good band are slowly dying off?

RafterManFMJ's picture

What about the whores? Won't someone PLEASE think of the whores?

TeamDepends's picture

Congress?  Don't you worry none li'l buddy, they'll come out of this smelling like a rose.  Until they swing from lampposts.  Then they'll be stinky.

Meat Hammer's picture

Nobody will swing.  They'll all escape untouched while we kill each other over Hot Pockets.  

I occassionally watch this video of the execution of Mussolini et al and stare off longingly into the distant horizon, imagining the faces in the video being those of McCain, W, Obozo, Boehner, the wookie, the Clintons, and many more.







booboo's picture

No, but it includes prostitutes and drug sales.

El Oregonian's picture

Is this still a... ummm, what does CNBC call it?... A "Soft Patch"?....

DaddyO's picture

What does anyone expect?

We just had an election yesterday and its more of the same, and we're expecting different results?

Insanity much?

As long as the sheeple continue to vote themselves into the treasury and the FED being happy to oblige, this will continue.

I've never been in a better place with my preps and attitudes towards continued decline caused by corruption in Wall St and Vichy DC.

They will not fix themselves and we are heading for a defining moment sometime in the not too distant future.

ZeroHedge Accordingly!


Abi Normal's picture

We did what we had to do in the 7th district and got rid of Cantor...doesn't seem the rest of the country got the message, sadly!


knukles's picture

Been tellin' ya'... the global economy sucks bad, big time.

If there's been no response after historically humongoloid 8 years of unparallelled fiscal and monetary stimulus, something's wrong and you all know what it is, and their behavior is not going to change.

Take 1 shot of Jackson (Banks) and 1 shot of Eisenhower (military-industrial-congressional complex) shake over campaign contributions and kiss your collective asses goodbye.

dontgoforit's picture

My hope is that when the maddened masses go looking for blood, they sieze upon the right characters to take out their wrath.  But that is unlikely as those folks will be 'gone' to bunkerland.

TheReplacement's picture

Everyone looks the same when you are hungry.

Sages wife's picture

That's the really scary part, you bet.  "When there is food on the table, there are many problems.  When there is no food on the table, there is only one problem."

dontgoforit's picture

And as Ian Fleming wrote as a chapter title in one of his many novels, "All Cats Are Grey in the Dark"

Abi Normal's picture

A man has to know his limitations!  Hope your bunkers and preps are ready? No, well then, you will become...what's for dinner!

Muppet Pimp's picture


The monetarists failed to make their case with the public. If the monetarists DID make their case with the public by stating that they would in no way expand the government, the public would have endorsed it. I blame this failure entirely on the monetarist public intellectuals who allied with the Keynesians instead of the Neo-classicals (improve industry) and Austrians (improve human capital) with whom most Americans are more sentimentally aligned – puritan ethics prevail.

From Here:

Has a hell of a lot of truth in it.

If economics were more concerned with the economy than impressing politicos and getting tenure at political organizations masquerading as educational institutions, the recession would have been much shorter.

LawsofPhysics's picture

Allow me to simplifty all that information;

Printing money and handing it out to a select few is no basis for a sound monetary system.

In addition, backing all risk/failure by robbing the tax base also accelerates your own demise.

Liquid Courage's picture

19th Century Wisdom:

"The ultimate result of shielding men from the effects of folly is to fill the world with fools."

Herbert Spencer English philosopher (1820 - 1903)


21st Century "Wisdom":

"Our credible commitment to these core elements is reflected in medium to longer-term inflation expectations remaining firmly anchored in line with the Governing Council's aim of keeping inflation rates below, but close to, 2 percent over the medium term."

ECB President Mario Draghi


Catch the contrast there? Drill down through Draghi's odious drivel and the contrast is exactly diametric.