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Please Help Us Find The Q2 "Spending Surge"
US services (and thus services spending) account for 68% of US GDP and 4 out of 5 US jobs. Thus, without spending on services the US economy can barely grow. That much is clear. What is also clear is that pundit after pundit has been lining up to explain how the Q1 economic collapse is to be ignored because it was due to, don't laugh, snow. Snow, which somehow wiped out of $100 billion in growth from initial expectations of Q1 GDP rising by 2.5%. What is certainly clear is that without spending on services in the second quarter, it is impossible for US GDP to hit its much desired 4% "bounceback" GDP print.
All of that is very clear.
What is not at all clear is just where is this services spending spree.
The chart below shows the monthly change in service spending as just reported by the BEA. The two bars comprising two-third of the second quarter are highlighted.
So - can someone please help us find just where is this much-hyped consumer spending spreed is please?
Source: BEA
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dog shit
Its the Yen no matter what the value http://www.marketwatch.com/ always says it is at $102 fixes everything
What is funny is the doom porn here. The OMG, IT'S ALL GONNA CRASH! has been repeated over and over and over and over again. Like a rain dance. To no avail.
Doom porn is nothing but latent primitivism wankery, longing for a simpler time, hoping for a repeat of Paradise Lost.
Primitivism is strong among libertarian types. Even Lew Rockwell has featured a prominent primitivist, Kirkpatrick Sale, for years.
• lewrockwell.com/author/kirkpatrick-sale/
• primitivism.com/sale.htm ("...the ugliness of the state...")
Not much difference, boys.
Remember, government is nothing but a techonology, with the definition of technology covering systems of organization, which is all government is. Being anti-government is being anti-technology and, indeed, anti-civilization.
A voice of reason? Here? Astonishing!
Welcome to the Internet. That is called a troll.
I don't think so...his other comments mesh pretty well with this one. Plus, while it's stated pretty bluntly, it has points to recommend it.
I was caught up in the doom porn stuff in about 2006 or so, and was getting tired of it by 2008. Then, against all reason, we elected the wanker POTUS, and I thought the first two years of his first term would likely sink the ship. The ship is still sailing.
I've gradually dialed back my doomer impulses (while keeping the preps in reserve, which is just good sense). While things cannot go on as they have, maybe it isn't a bonafide collapse that will rectify the situation. I don't really know what the alternatives are, but we're already so much farther in debt as a society that I could not have featured it even a few short years ago. Maybe there's a long run of the status quo yet before a Big Change. My wisdom has proven faulty, and not facing that would be much worse than facing it squarely.
In the meantime, I've just begun living my life normally again, keeping a weather eye on the markets and our buffoon leaders and everything else I can so if the time comes when I really do need to jump, I'll know which way.
Oh, and I'm trying to switch to teaching high school. Not only does it look like a ton of fun, but it's a chance to try to inject some reality into the education of young folks and get summers off to spend reading and camping and at the beach. I didn't need two thirds of my salary anyway.
You can't stop the seasons of time. You can bundle up for the winter but you can't make the winter season not arrive. Read the fourth turning and youll see your paradigm spiraling down the toilet. The fact that it was written in 1997 (initial release) should disturb anyone when they read his "possible scenarios" for the current fourth turning. (All empasis is mine.) I have bolded every item that has happened in its core form.
CHAPTER 10 A Fourth Turning Prophecy
Sometime around the year 2005, (911 and 08 perhaps?) perhaps a few years before or after, America will enter the Fourth Turning. In the middle Oh-Ohs, America will be a very different society than in the late 1920s, when the last Crisis catalyzed. The nation will be more affluent, enjoy better health, possess more technology, encompass a larger and more diverse population, and command more powerful weapons—but the same could be said about every other Unraveling era society compared to its predecessor. They were not exempt from the saeculum; nor will we be.
A spark will ignite a new mood . Today, the same spark would flame briefly but then extinguish, its last flicker merely confirming and deepening the Unraveling-era mind-set. This time, though, it will catalyze a Crisis. In retrospect, the spark might seem as ominous as a financial crash, as ordinary as a national election , or as trivial as a Tea Party. It could be a rapid succession of small events in which the ominous, the ordinary, and the trivial are commingled.
Recall that a Crisis catalyst involves scenarios distinctly imaginable eight or ten years in advance. Based on recent Unraveling-era trends, the following circa-2005 scenarios might seem plausible:
Beset by a fiscal crisis, a state lays claim to its residents' federal tax monies. Declaring this an act of secession, the president obtains a federal injunction. The governor refuses to back down. Federal marshals enforce the court order. Similar tax rebellions spring up in other states. Treasury bill auctions are suspended. Militia violence breaks out. Cyberterrorists destroy IRS databases. U.S. special forces are put on alert. Demands issue for a new Constitutional Convention.
A global terrorist group blows up an aircraft and announces it possesses portable nuclear weapons. The United States and its allies launch a preemptive strike. The terrorists threaten to retaliate against an American city. Congress declares war and authorizes unlimited house-to-house searches. (The Patriot Act/NSA) Opponents charge that the president concocted the emergency for political purposes. A nationwide strike is declared. Foreign capital flees the U.S.
An impasse over the federal budget reaches a stalemate. The president and Congress both refuse to back down, triggering a near-total government shutdown. The president declares emergency powers. Congress rescinds his authority. Dollar and bond prices plummet. The president threatens to stop Social Security checks. Congress refuses to raise the debt ceiling. Default looms. Wall Street panics.
The Centers for Disease Control and Prevention announce the spread of a new communicable virus. The disease reaches densely populated areas, killing some. Congress enacts mandatory quarantine measures. The president orders the National Guard to throw prophylactic cordons around unsafe neighborhoods. Mayors resist. Urban gangs battle suburban militias. Calls mount for the president to declare martial law.
Growing anarchy throughout the former Soviet republics prompts Russia to conduct training exercises around its borders. Lithuania erupts in civil war. Negotiations break down. U.S. diplomats are captured and publicly taunted. The president airlifts troops to rescue them and orders ships into the Black Sea. Iran declares its alliance with Russia. Gold and oil prices soar. Congress debates restoring the draft.
It's highly unlikely that any one of these scenarios will actually happen. What is likely , however, is that the catalyst will unfold according to a basic Crisis dynamic that underlies all of these scenarios: An initial spark will trigger a chain reaction of unyielding responses and further emergencies. The core elements of these scenarios (debt, civic decay, global disorder) will matter more than the details, which the catalyst will juxtapose and connect in some unknowable way. If foreign societies are also entering a Fourth Turning, this could accelerate the chain reaction.
Strauss, William; Howe, Neil (2009-01-16). The Fourth Turning (Kindle Locations 5476-5505). Crown Publishing Group. Kindle Edition.
So there you are. It is not so much that OMG its gonna crash as opposed to Winter is comming and you can mock it all you want but it is still gonna get cold. The author details every fourth turning in American history and it becomes glaringly clear to anyone with common sense.
http://www.amazon.com/The-Fourth-Turning-American-Rendezvous/dp/0767900464
Cool, so apparently according to you, I'm an "anti-technology" person who has been employed as an IT professional for most of his career.
I can't help but wonder if you realize the absurdity of the fact that according to your own logic, Hitler is just a human being, and therefore being anti-Hitler is being anti-human.
Which fits right in with, housing prices never go down, we are the indispensable nation, Russia is uncivilized, and all the rest of the Amerikan fantasy world.
What a load of shit! This corrupt Federal government is on a path to spectacular destruction, not just of the wealth of US citizens and the purchasing power of the dollar, but also the lives of millions of non US citizens. Your idiocy about government being nothing more than a technology for organizing systems sidesteps the most important concepts of self-determination, freedom, corruption, and inefficiency. I will stand for freedom, and I will cheer the destruction of tyrants.
Tylyer, buddy, Timothy Leary would see it.
For those who are thinking who the fuck is Timothy Leary
http://en.wikipedia.org/wiki/Timothy_Leary
and
http://www.youtube.com/watch?v=6EXCIWlm1fs
Turn on, tune in, and drop out your transmission. Should have went with an Allison.
http://www.youtube.com/watch?v=SQq_XmhBTgg
There is clearly some kind of axis issue affecting the chart.
That or a 22 inch monitor is too small for the proper effect.
R2k H&S in play
You need special glasses to see the spending. And something called a "microdot".
Looks like everybody with a refund coming got it early(March). Also same spending pattern last year.
Weak April and May.
Everybody saving to spend a weekend at the beach?
It has not been created yet. But it will be.
<There will be no failure of imagination when it comes to economic statistics.>
Are these adjusted real dollars Tyler ?
If so, at what defator ?
What is this "real dollars" to which you refer? You mean gold?
It was low in April-May 2013, GDP growth was 2.5% in Q2 last year.
Vehicles. People bought REALLY expensive trucks and SUVs. $40,000 a pop.
The automakers know that vehicles are a necessity, just like gas and food. They just crank the price up and people take out 7 or 8 year loans to pay for them. Hell, a fucking used one is just as expensive as a new one on an annual basis. Say it'll last 8 years, that's 5 grand a year for a new one. We just bought a used one for more than $20k, or the equivalent of over $5000 a year.
Way to go automakers. May you reap what you sow.
I remember when a Mustang or Camaro was under 17k..now the fuckers are over 40k. Trucks are 50k for the fancy ones. Soon 60k etc...this is no way to live.
Any time you can leave or fight system=)
My 1968 Camaro bought new cost $2987. My 1969 cost $ 3200.
and they were made out of metal. today's vehicles are plastic. apparently plastic is expensive. must be valuable, like gold.
I looked at a 2014 Mustang GT 5.0 ...it was really made nice ...no cheap materials really except the door panels kinda....but all soft touch materials inside the cockpit...425 hp dohc engine revs to 7k....fast as shit but the price was high of course. The camaro was piss poor inside the cockpit....dash was hard plastic with a fake looking leather strip on top/cheap plastic everywhere...gauges/fonts looked like something out of the 80's (gm quality for ya nowadays)...anyways I love old muscle better.
Yup. Our LUXURY buick has real leather, but a crap load of genuine fake wood and chrome accents.
I do like the heated seats, though. They're help keep me warm, what with all this climate change, and shit.
Yeah, well, I bought a new 1975 corvette for $8,100. By 1980 it was pushing double that. Most don't realize how fast inflation can take hold and its only after, that you realize just exactly how bad you have been robbed. A new viper was $74k in 2000, now they are $135K. They are using a "chained" approach to raise prices. By continually offering cheaper alternatives we find ourselves eating horse burgers rather than Angus for the same price, while they just keep calling them hamburgers.
With sub-prime loans
The spending is coming from real estate, internet services, and healthcare. I.E. middle men
Nothing is getting made to export, minus maybe Boeing jets and drones/submarines/tanks for the military for the <insert upcoming war here>
Buy a cheap Lincoln Town Car with some miles from a livery (or a Crown Vic,) drop a Cummins 4BT and and Allison transmission in it, and roll some coal.
These two would look better with a hood stack, but they're still cool. And legal. :)
http://www.youtube.com/watch?v=LYAnvSEVLBY
http://www.youtube.com/watch?v=y7FT4z4U8Xw
What? You don't know how to weld? LOL, and you present yourself to the public as a male. Enjoy working in a place where you can't tell jokes about girls? What sort of emasculated man works in a joint like that?
Who cares, it's almost 09:30. Ramp this bitch!
Oh well, commentators curse I guess. Sorry guys.
'I'm giving all she's got Captain, I just dinnae have the Yen!"
Day ain't over yet ...btw, 2 trading days left til the Wall St. leeches collect 2nd quarter bonus checks .
The dilithium crystals are exhausted.
well, if it makes you all feel better, here in Europe Q2 is way worse :)
They just haven't had the chance to "revise" them for accuracy yet. Everything will soon be right as rain...or a devastating hail storm. Precipitation can be a bitch.
SD...off-topic, but any correlation between Belgium's performance at the World Cup and it's appetite for US debt? Maybe the FIFA is the Fed's payback agent to make sure Espanol, England, and the 'bite me' Italians are all home because they weren't on the take with Treasuries? Inquiring minds want to know...
I hear gold can paper (lol) over these cracks ... oh shit, you need to have some in the first place!
It's gonna come in June, duh, where's your faith?
Yes I expect the next 6 days to make up for the first 84 days. ..... don't worry, all will be fine
Yep, massive boner of a June bar in next months print (to da’ moon as you would say).
Spending or maybe "paying off" debt, bills, groceries, gas, and the occasional drug/booze habits.
illegals are the next and only growth business!! More disease, more free medical care, more free education, more free EBT cards, more free housing, more free iphones, wifi. more free job training. No one understands this is a stimulus QE never ending program. Just think about the size of this market, it could be billions.
Progressives have determined that illegals will vote 'D' for far less than their traditional constituencies. Most of those traditional 'D' voters either never did have jobs or lost them when the unions went kaput.
The two bars comprising two-third of the second quarter are highlighted
I was in one of those bars..and I was spending....mas cerveca por favor
It's easy to get a 6% spending spree this quarter. Ramp up inflation to 10% but then subtract a couple percent for some actual cutting back by the consumer. And if that doesn't work - just make up the number you want!
Anyway we can switch April and May for March ????
I see the last spike as due to tax refunds.
http://www.consumerindexes.com/commentary_2010_demand_index_48months_full.png
That chart is what is really going on. Without the fluffing of the numbers with faske inflation numbers and the rest GDP has been negative for a while even with a lot of population growth.
Everyone knows this negative conjecture is simply made up by racists determined to undermine Obama's miraculous ongoing recovery. A black man just can't get a break!
Your chocolate rations have just been increased...again!
It's so bad now that they can't ever hide it anymore.
What you can really draw from that chart is that when they manufacture a really big PCE number for a given month, they have to give it back the next 2 months so that the manipulated data does not get too out of wack.
2013 fourth quarter GDP is a good example, they fudged up consumption to show awesome growth, but Q1 2014 GDP had to pay the price for the prior manipulation.
You assume Q2 GDP will be reported.
You assume too much.
All you need to do is add what the Fed is spending to the consumer spending figures and voila..spending spree!!!
If only you would believe, the spending surge will occur. Your messiah will provide.
"zerohedge @zerohedge 53s
BULLARD: ECONOMY SHOULD BE ABLE TO HANDLE IT IF WE BEGIN TO PULL BACK FROM WHERE MONETARY POLICY IS NOW. Let's find out shall we"
Ha ha, since when anything the Fraud does, have anything to do with the eCONomy?
You need to wait until the numbers get revised and then you will see the surge---oops, oh no, wait, usually they revise the numbers down so that year over year comparisons are easier. Well, hey, they print whatever number they want so never mind, my bad!
Where's 'noise' when you need it?
Noise is in the forest but there is no one there to hear it.
Stop looking at facts and data.
Simply believe what you are told and all will be fine.
"Do not try to grow the economy. That's impossible. Instead... only try to realize the truth. There is no economy. Then you'll see, that it is not the economy that grows, it is only the oligarchs wallet. "
Rupert? Are you banging your pots again? Bad Rupert, bad.
This surely will send DOW to 999999999999999999999999999999999
Very few chosen ones have benefited from loose monetary central bank policies. The true extent of slowdown in the world economy can be judged by the data points which are not subjected to adjustments by the government. Eg. Change in Electricity and Fuel consumption, Ratio of working population to the total population of a country, Miles driven, Baltic Dry Index, Change in commercial Rental Rates etc.
Derivative positions determine price movements and the media and so called financial experts scramble to assign reasons linking the moves with events in the real economy.
http://www.marketoracle.co.uk/Article40231.html
The author of this piece needs a refresher course on how to interpret bar charts. The fact that March expenditures were substantially above February expenditures means that even though April and May expenditures were relatively flat, the second quarter level (so far) is substantially above the first quarter cumulative level. When the data, properly interpreted, proves (in the first two months of the second quarter, at least) the exact opposite of what you are claiming, it really discredits the author's "expertise" in maintaining that the economy is weak (which may in fact be true for the whole year).
lol, soooo since each month of the 1st quarter was positive, and the months are cumulative (according to you they pile on to the prior months), how pray tell, did the 1st quarter post a -2.9. Since nothing has been negative since august 2012 and it's all cumulative, shouldn't 1st quarter growth have been north of 3%?
Kprime, lol you're so misguided. Q1 real consumer expenditures on services (the whole point of this zero hedge piece) increased 1.5% annualized, and will increase at a faster rate in Q2 barring a setback in June (or a significant revision to April/May numbers, always a possibility). Q1 real GDP did decline 2.9% ... largely due to dramatically higher net imports and dramatically slower business inventory accumulation. That is "how, pray tell", GDP fell as much as it did in Q1.
Well GDP is supposed to be relative to the prior quarter and March was part of that. Just reading the other consumption/expenditure numbers doesn't bode well for Q2 -but I think the initial number will at least be positive and more than 1% higher than the final Q2 number. They won't let it be negative. Heck in Q1 they used a lowball inflation number even compared to their other govt lowball inflation numbers to keep it from being Negative 4% GDP.
lawton2, you're right March is part of Q1, and so the very strong real consumer services expenditures growth in March lifts the Q1 number. If June growth is as tepid as April and May, the run rate will be only marginally above the March level, but still sizably above the Q1 average level due to January and February being much lower than the March level.
Not buying anything(except food/gas) this month. Probably will stock up on stationary next month when Staples/Office Depot start their back to school sales. Back to School sales used to occur at the end of August. Now they have them around the 4th of July. Stores are desperate. Stock up on their doorbuster sales and save mucho deniro.
Which pill was I supposed to take the red or the blue? I think I fucked up!
Take both. This is our world..delusion and reality occupying the same space at the same time.
Did somebody forget to carry the one?
People keep telling me, "look, there it is!" But I don't see it. I have looked everywhere and still can't find it.
Alan Greenspan
Damn it... stop looking for the details. Accept it and move on...
Gheesh, not being a team player. All is good cuz they say so.
I thought an explanation for low sales was made by the gov. a month ago when April sales were so low.
It was because of, wait for it, the weather! Evidently the winter was so bad that when the weather improved people were "forced" to go outside to enjoy it, thus not spending as much as they should.
Leave it to the spin-meisters to explain everything. They are sooo much smarter than the rest of us.
The Federal Government is the borrower/customer of last resort.
The Federal Reserve is the lender of last resort.
That's the equation, F + F = FUCKED.
The blueprint to lasting prosperity.
hahahahahahahahaha
'
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'If Canada's GDP doesn't drop 3%, the US statistics guys have sum 'splaining ta do!
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V-V