This page has been archived and commenting is disabled.
GDP Disaster: Final Q1 GDP Crashes To -2.9%, Lowest Since 2009, Far Below The Worst Expectations
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
- 76846 reads
- Printer-friendly version
- Send to friend
- advertisements -






Is this really a shocker?
Current Job Situation: http://www.dailyjobcuts.com
-
LESSON #1: BUBBLE ECONOMIES DO NOT WORK! THEY ALWAYS FAIL!
Perhaps it's time that the USA goes back to free-market capitalism rather than a Fed-controlled, centrally planned economy?
Looks like Japan stick the "Mission accomplished" sign in the ground and moved on like the fed has. GDP be damned.
http://www.bloomberg.com/news/2014-06-24/abe-declares-end-of-deflation-a...
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.
I'll take Obamacare and 29.5 hr/wk jobs for a thousand Alex.
The current massive misallocation of capital caused by ZIRP, QE, and bailouts MUST END ...
We really need to rename the Washington Redskins......gotta get on that!
Can you say "massive liquidity crisis dead ahead the Fed can't fix!"?
Yeah...
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.
And with real inflation running at about 10%, what is real (inflation-adjusted) GDP actually doing?
My stacks are a bit shinier this morning.
So, does this new number include government spending and interest on the debt?...
One brief comment regarding this morning's GDP number:
"Lavorgna !"
Fredo: You're smaaaart. Not dumb... like everybody says.
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.
Slightly OT, but really it's all related. Libertarians are going to go a little apoplectic seeign this video:
http://govtslaves.info/journalist-accosted-security-mayor-bloomberg-gun-...
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)
DOW is up 22 points.
nothing to see here.
Move on...
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.
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?
Six sigma miss? Hmmm, I hope Mrs. Sixsigma isn't reading this...
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.
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.
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"
Wooohoooo!!!
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.
At least no one's proposing an increase to gas taxes.
Oh wait.
Exactly, and it's not like there are hordes of unwashed underwearless masses invading from the south either.
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.
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?
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
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.
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 then...bank 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...
maybe it's the KISS memorabilia, the idiots that thought they were a good band are slowly dying off?
What about the whores? Won't someone PLEASE think of the whores?
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.
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 http://www.liveleak.com/view?i=381_1322985947 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.
Never
Gonna
Happen
Never
Say
Never
http://www.youtube.com/watch?v=bYDe4d6ohXw
Was it over when ISIS bombed Pearl Harbor?
No, but it includes prostitutes and drug sales.
Is this still a... ummm, what does CNBC call it?... A "Soft Patch"?....
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!
DaddyO
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!
VOTE ALL INCUMBENTS OOOOOUUUUUUUTTTTTTT! FUCK...
Been tellin' ya'... the global economy sucks bad, big time.
LIQUIDITY TRAP
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.
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.
Everyone looks the same when you are hungry.
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."
And as Ian Fleming wrote as a chapter title in one of his many novels, "All Cats Are Grey in the Dark"
A man has to know his limitations! Hope your bunkers and preps are ready? No, well then, you will become...what's for dinner!
This:
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:
http://www.propertarianism.com/2012/02/10/monetarists-picked-the-wrong-allies-in-keynesians/
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.
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.
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.
So, I am heading out to work today listening for the traffic reports and I hear that GDP contracted about 3% for the last quarter. I say, "Holy shit, that is big!" to myself. I then wait to hear the early stock market numbers figuring that I will hear of some huge drops like 200 points given the current lofty heights. What do I hear, "Market up about 28 points."
Then I do a second "Holy shit!". I feel like we are in economic Alice in Wonderland. There is now about zero connection between the market and any rational economic thinking. The market is tied to HFT programs and completely focused on government/Fed/Central bank actions...not actual economic data.
This is really insanity and the complete coopting of the economy by central planners and the willing participation of the financial sector. It is codependency at best between the two or you conspiracy types are right. I might have to apologize one day.
And the filthy paper shufflers shrug their shoulders, chuckle a bit and then go about deciding which Ferrari to drive today. Welcome to the Gilded Age 2 motherfuckers!
The second quarter is going to be only marginally less horrible and still deeply negative..
Two quarters of negative GDP is the Government's own definition of a recession.
Bush is long long gone and cannot be blamed any further for the state of affairs and Executive choices leading to or reacting to that state of affairs.
WELCOME TO OBAMA'S RECESSION.
Let's see how Barack Recession Obama and his corrupt Bunglers tries to spin their way out of this mess...
You are as deluded as the rest. This will NEVER be hung on Obama by the MSM, and that is all that counts. Everyone else is a right wing extremist bitterly clinging to the policies of JFK.
You mean Nixon. Or maybe Hitler.
Yeah, Hitler was the guy pushing for smaller government, lower taxes and the rule of law.
Which is the fed what's to put exit taxes on bonds
Hockey stick second half growth forecasts in 3...2....1.... "it was the weather, we expect the second half to roar back. Just look at the new and existing home sales numbers... they are great.. blah... blah... blah.... spin.... spin... spin..."
Fucking break aleady. I like making money more on the short side.
But this time it is different..really it is. Everything is going up in U.S. dollars.
It may cost you $100 for a cup of coffee but your portifolo gave you a solid 9%....
Pre-tax that is. Oh and wait... with the coming capital controls and government take over of 401k etc... you will get a piece of paper telling you how wonderful it is.
Meanwhile the USG will be paying BONUSES again for all it's minions.
Retail has been miserable. It showed a good picture of how miserable/depressed this economy is with a disappearing Middle Class.
My prediction is that they will blame the weather.
Which is interesting in itself. While running around the country and world making global warming (AGW) the number #1 priority, they are going to blame the severe cold weather for GDP collapse.
Washington Tea Party Guys , I Mean Indians tossed all that Tea into the Bay, when they were mad at the Government right .
close enough to me..
Don't forget the Vikings. Those losers are making a mockery of my ancestors.
How bout the Washington Foreskins
How about the Hacks, or Influence Peddlers?
these GDP contractions are coming closer together. Get dat biatch to the hospital!
Geez! Look at these computers turn this trainwreck straight to the moon. DIE!
DAILY DOUBLE. You're in the lead with negative 2.9%. What would you like to wager, GetZeeGold?
Is anyone wondering why they ever let this report see the light of day? It must be to provide context for what comes next. 1st quarter is dead and gone, so it is now the new baseline. Its all up from here right? A big positive .o2% growth for the second quarter is nothing but blue skies forever.
uhm, no. it gets worse from here as contractions keep going deeper and deeper unless they put money in people's pockets to turn this around. Won't happen.
People are still broker and the banks are now tightening credit again.
however mortgage qualification standards are easing again. lower FICO scores for agency and gift funds as downpayment (zero equity) for FNMA. GNMA is subprime.
Yes, theoretically but the banks still have to actually hand out the cash and mortgage applications are at their lowest levels. Sales of homes in CA which is a key market are down 20% in part due to a much lower inventory as fewer listings on the market.
Once the news of this -3% print is digested, businesses and individuals will go back into starvation mode. Guaranteed.
The only people they are putting money in the pockets of are those at the top who are buying stocks and those at the bottom who are spending it all on Chinese crap that doesn't stay in our economy. The middle class consumers are being sucked dry.
What is: Redefine base GDP measures and terms (again) and adjust at the next print for seasonal weather...
Did the NBER change their definition of a recession to what it was prior to Bush?
Probably; they've changed everything else. Hope and miserable change. How did people fall for this fool? Hard to believe.
Dreams From His Father are nightmares for us.
Do you guys remember how the gov massaged the input model last year? Fucking charlatans, from the spring of 2013:
The government has now made a significant change in the gross investment number (I), which now includes research and development (R&D) spending, art, music, film royalties, books and theatre. This change in GDP statistics has not been implemented elsewhere in the world. So the United States is the first to accomplish this rewriting of the GDP number.
R&D spending, which shouldn't even be accounted for as investment, adds a significant amount to the GDP number — it accounts for around 2 percent of U.S. GDP. Art, music, film royalties, books and theatre add another 0.5 percent.
Another adjustment has been made to pension accounting. Previously, pension spending was included in GDP. After this adjustment, however, we also look at the "promise" to pay out pensions. So we are talking about imaginary numbers that are now included in GDP.
A last example is found in real estate. Commissions, legal bills and expenditures on real estate transactions are included in GDP as "investment." Obviously these expenditures aren't associated with real production.
How bad would it have been without this? Who knows.Mission accomplished here again I guess! Good job Ben, you bailed out at the right time!
.
Belgium, this is Washington calling. We have a problem. Please print more money. What? What was that? Oh... You're already printing it at a negative interest rate.
Well then... It must be the weather in that case?
The system is failing due to the depletion of non-renewable resources.
Free market capitalism would merely attempt to accelerate that process and make the problem worse.
Fuck free-market capitalism.
Fuck your hard-on for violence and force, statist.
DEAD FUCKING ON. Specifically oil:
High energy prices = less consumption because everything including the fuel in your tank costs more = layoffs = less tax revenue = government cutbacks, layoffs and debt increases = less consumption = more layoffs = less taxes ===== economic death spiral.
Compounding the problem is the fact that a weak labour market means real wages drop - as they are across the world right now - that means everything is more expensive and your buying power is dropping at the same time.
Governments recognize this and are trying to offset with debt, easy lending (they are purposely inflating bubbles), lower interest rates and money printing.
This all started in 2002 when oil went from $12 a barrel to nearly $40 (and of course has never looked back)
Of course they will fail - because the disease is expensive oil. And there is no substitute
The economic death spiral will accelerate when the QE and ZIRP no longer have any effect and the confidence game collapses.
This moment will be known as the end of the industrial revolution by the few who survive.
This is not a Hollywood movie where the hero saves the day. This is the reality we are facing.
Oh and those with their cute little shorts --- guess what --- you will eventually be right -- but you will collect a fist full of air... because when this fucker busts --- even gold will be worth fuck all --- you will be able to pile your gold 20 feet in front of a pile of canned goods... and the starving zombies will stagger right past it --- with their can openers.
LESSON #2: Governments do not work. They always fail.
For the idiocracy...
Ow my balls
http://www.youtube.com/watch?v=wAg1r6zw7Bg
IT'S BUSH'S FAULT
unexpected?
Obamacare has sucked out all the discretionary income of America into insurance company/Fed.Gov pockets.
Somebody is not paying attention if they're truly suprised by this.
suprisingly, stocks are up now. this means 2 things could have happened. 1. certain people knew about the GDP fail in advance yesterday and sold the market mid-morning to the close, then after the announcement today, they covered. or 2. the fed stepped in and bailed out the market from reacting negatively to a much worse than expected number.
Take your pick, 1 or 2. either one is crap and the fact that stocks are higher on a horrible GDP number is total bullshit.
Hope & Change
Nothing that another "Summer of Recovery" can't fix.
Biden promised 250-500k jobs. Obama said shovel jobs weren't so shovel ready. The press laughed. Americans got fucked. Again.
he meant $250 - $500k jobs - for his mates
No he meant 250 to 500k more USG employee bonuses! And that many more IRS, DHS, HHS, etc... people. Can't have all that ammo with no one to properly disperse it.
Can't have a rebellion if everyone works for them, and is sucking on the same hind tit.
Two articles posted here tells me this "Free Market" is rigged beyond anyone's imagination.
1. http://www.zerohedge.com/news/2014-01-12/great-buyback-surge-over-corpor...
2. http://www.zerohedge.com/news/2014-06-15/cluster-central-banks-have-secr...
N'fuff said.
Chelsea CLINTON got a very nice $600K part-time job at NBC.
Hunter BIDEN and Devon Archer are both pulling fat salaries sitting on the board of the Ukrainian gas co. Burisma Holdings.
Malia and Sasha OBAMA are now Senior Staff to the First Lady according to Michelle Obama's official expense reports.
Rory REID got a great job with Chinese owned energy consortium ENN Energy and is in charge of wrangling the subsidized purchase of Federally controlled land in Nevada.
Obama and Biden and Co. can find those $250K to $500K+++ jobs when they want to.
Maybe WE SHOULD ALL SEND OUR RESUMES TO THEIR OFFICES AND ASK THEM TO FIND THE KIND OF JOBS THEY GET FOR THEIR CHILDREN AND CRONIFACTORS FOR ALL OF US.
MAIL ALL RESUMES TO:
BARACK OBAMA
@ 'Find Me a Good Job, too.'
1600 Pennsylvania Ave NW,
Washington, DC 20500
the only thing obama needs a shovel for is his own shit, which is now piling up rather deeply.
It's un-American to be bearish. Go out and spend, bitchez!
Bitchez are spending but there is no money left after food and fuel.
Yeah, spent the money, but even the bitchez are low on cash these days :))
And if you won't spend, we'll do it for you, and send your grandkids the bill.
Get to work Mr. Yellen.
The Q1 GDP print is just noise.
'just noise' is what comes out of yellen's trap
Belgium's been exposed. Now it will be Zimbabwe.
He's been working. Printing and fudging. Still -2.9. Wow. The Fed saves but reality puts in the rebounds.
Clearly an excuse for Taper OFF
Uh oh
Annnnnd Futues barely blink!! LOL... just f-ing BTFATH.
There's a biggish POMO today.
DavidC
Nah, that was picked up in yesterday's sell off. The insiders knew it was a crap GDP, and got out early. They'll BTFD today.
Because it's the past. Everyone is looking towards the rose-colored glass future!!
Is it rose-colored, or blood-colored?
More like Hawiian Punch to me.
#41
...still hesitant to short this turd. LOL. Too many black eyes from before I suppose.
Do not short. Do not go long.
Exit and seek farmland. Do you really think you'll regret it in ten years?
Probably. Farmland is inflated like everything else. Of course if you just need a plot to grow your own food...
Is it inflation when those with cash are willing to give anything to hold something tangible rather than sitting on piles of worthless cash that gets diluted day after day after day?
Prices in shitty USD paper will never go down again unless it's on the auction block. By then who knows if the auctioneers will even transact with USD anymore.
LOL
So we can expect the SP500 to hit new record highs today.
It was right in line with my expectations.
Wow. That was a lotta snow!
And I just keep getting richer. When you start REALLY starving, see my overseer about a job pickin cotton on my expanding plantation.
pretty much, should have pledged fealty, too bad my conscience got in the way.
Bad winter. No doubt about it. So, how's Q2 doing?
The chart is a bit fudgy though. what's with the 3 figures for Q1? Get rid of the 1st and 2nd revision.
Q2 is doing just like Q1. Instead of pulling in sales, we will soon be told not to worry because Q4 will be 8% as long as we elect the right team.
The US economy will EXPLODE in Q4 with all the pent up demand. China better be ready.
Is that before or after the adjustment for weather?
DaddyO
The gardner, Chance, says, "In the spring, there will be growth." - Jerzy Kosinski, Being There
In the winter if there's snow, you must count hookers and blow!
#WINNING!
Hahahaha
(what else is there to say)
Lololololololo (that's what).
Bee-dee-waddup!
Yes but all surveys are hitting extreme level of optimism. And this GDP number was massaged up also by liers
Optimism is a sure sign that delusion has peaked. Hope and optimism are walking hand in hand here. Reality is death which only makes hope all the more important. Onward to the afterlife!!!
Gold will fall as Americans unlikely to buy luxury goods. S&P will surge as investors seek a safe haven asset.
No, Really.
#41
Keep buying US Treasuries - the US will grow out of its massive debt and unfunded liabilities of $1,260,000 per taxpayer and rising at $69,000 per year. Forward.
Anddd one more time.
If you believe in US growth and Obama leadership, you short US T's.
If you don't. If you see Japan then you know 0.5% US T's also looks like Japan.
Can we get back to talking about important issues like racist Donald Sterling and changing the name of the Washington Redskins?
This GDP talk is so unimportant. BTW, when's the iPhone 6 coming out?
Hey remember this:
https://twitter.com/huffpostbiz/status/461644916787933186
"Obamacare just saved the U.S. economy from contraction "
Thank goodness we have HuffPo....
the problem is obamacare was not big enouigh to include pets, dogs cats, hampsters
And rabbits. Don't forget my bunny. He's cute and soft and likes to cuddle. He deserves healthcare, too. *think* Just ike my favorite stripper...
Shhh. Just had visions of a lightbulb moment in the WH.
Oooops, must be really really bad in actual reality if the fake numbers are as bad as THAT!
Let's start with the unicorn and skittles deflator which doesn't come close to backing out what real inflation is to adjust the nominal GDP print. This GDP print was much lower in real terms than shown if using the true deflator.
Stay away from tall buildings today, it's going to be raining bankers.