Exposing The Deception: How The US Economy "Grew" By $140 Billion As Americans Became Poorer

Tyler Durden's picture

This is simply stunning.

Regular readers will recall that last month, at the same time as the US Bureau of Economic Analysis reported was a far better than expected 3.9% GDP (since revised to 5.0% on the back of the previously noted Obamacare spending surge), it also released its Personal Spending and Income numbers for the month of October, or rather revised numbers, because as we explained exactly one month ago "Americans Are Suddenly $80 Billion "Poorer"" thanks to (upward) revised spending data and (downward) revised income. What this meant a month ago is that as a result of a plunge in the imputed US savings rate, some $80 billion in personal savings was revised away from the average American household and right into the US economy.

After all, something had to grow the US GDP by a massive amount in order to give the Fed the green light it needs to hike rates eventually, just so it can then ease when the global dry powders from all the other central banks is used up.

And sure enough, this is how just one month ago, personal income was revised lower...


... Even as personal spending was revised higher:


Leading to an $80 billion revision lower in personal saving, and by mathematical identity, a comparable growth in US GDP.


* * *

Fast forward to today when we find that... absolutely nothing has changed, and in order to boost US GDP some more, the BEA engaged in precisely the same data revision trick!

On the surface, today's Personal Income and Spending data were inline to a little bit better than expected:

  • Personal Income supposedly rose 0.4% in November, up from a 0.3% revised growth in October, and in line with expectations.
  • Personal Spending supposedly also rose, this time by 0.6%, up from an upward revised 0.3%, and just above the 0.5% expected. Of note: real spending on gasoline and other energy goods rose 4.1%. Wait, what? Wasn't spending on energy supposed to drop?

So far so good: nothing abnormal (except for the clearly made up spending data), and in isolation this data would be good, suggesting the US consumer is getting more confident and is spending ever more as the year closes, on expectations of higher paying jobs, stronger economy, etc.

And then we looked at the Personal Savings number: it was reported at 4.4% in November, down from 4.6% in October. Which is odd because last month, the October savings rate was disclosed as 5.0%, in turn down from a downward revised 5.6% in September.

Wait, could the BEA be engaging in precisely the same deception in November as it did in October.

Why yes, Virgina: not only did the US Department of Economic Truth completely fabricate its GDP numbers earlier, but the way it got to said fabrication is by fudging - for the second month in a row - both the entire Personal Income and Personal Spending data series.

Behold what the original data looked like in October, in November, when the extensive and already documented data revision took place, and just now, when the December data shows that the BEA once again revised everything just as it had previously.

To wit: here is Personal Income, revised substantially lower yet again, for every single datapoint of Q3 and then some, from July until October!


Sure enough, here is the revision to Personal Outlays: once again, a reduction in income magically meant that US household spent more in retrospect. As the chart below shows, Personal Outlays (Spending) was revised higher from July until October as well. What is most impressive is how the revision shifted the slope of US personal spending from one of Slowdown as reprted in October, to a literal explosion based on the latest data.


So how was all this spending funded? Simple: Americans "supposedly" dug massively into their savings, and as the following chart shows, Personal Savings have now crashed from what was originally an "unrevised" 5.6% in September, subsequently revised to 5.0% in November and 4.5% currently, and all the way down to 4.4% in November. Incidentally, this is the lowest savings rate since 2013, and the lowest savings rate for the month of November since 2006!


So what do all these revisions mean numerically? Luckily we can put absolute numbers alongside the savings rates, and as the following chart show, as of September 30, or the end of Q3, when US GDP supposedly soared by 5% annualized we now know that data revisions of personal income and spending alone generated...


... A whopping $140 billion in GDP!

So what does this mean? Well, as we learned earlier US GDP grew in Q3 by a nominal $272 billion to $17.6 trillion. We now know that more than half of this increase came from, drum roll please, data revisions!

In other words, US GDP, using pre-revision data, would have been less than 2.5%. But that woul dhardly lead to the euphoric blow-off top rally we have seen today which sent the DJIA for the first time ever above 18,000, which in turn is so critical to boost consumer confidence so Americans will, in real life, do what the BEA hopes they have already done at least on paper, and that is reduce their savings by a whopping 20% at the end of September, or by some $140 billion, to $593 billion in order to spend, spend, spend.

And the other irony: as the BEA also reported, what did Americans allegedly spend the bulk of their savings on?


So in short, today the market is euphoric and hitting all time highs because Americans dug into their savings and spent billions on the "Affordable" Care Act.

And that, ladies and gentlemen, is the short answer why the US is "growing" when the rest of the world is mired in a triple (or quadruple if one is Japan) recession.

Source: Bureau of Economic Analysis

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thatthingcanfly's picture

I'm announcing the data point that my schlong is 12 inches long.

Expect data revision in one month.

hedgeless_horseman's picture



So how was all this spending funded? Simple: Americans "supposedly" dug massively into their savings...




We don't need no stinkin' savings!

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Like Steve Liesman says, "Consumer credit is the bridge from working hard to playing hard in America!"  Not savings.

Dr. Richard Head's picture

Expect WalMart numbers to thrive in the coming months considering they are offering and promoting credit (everyone needs a Sony PSwhatever).  

Ahoy Polloi's picture

Tribe got richer, you got poorer. Any questions?

Skateboarder's picture

Where do I collect my ObamaCar?

KnuckleDragger-X's picture

They are waiting for the new model Yugo....

Government needs you to pay taxes's picture

Methinks the Trabant would be a more appropriate luxury auto marque for this ObamaCar conversation.  Not 1 but 2 cylinders, very little rubber on the road (better for the environment), and lightweight (no pesky heat or AC, very enviro-friendly). 

Self-enslavement's picture

We're buying anything but Gold...
Blame it anything but the parasitic thieving chosenites...

GetZeeGold's picture



The US is a great place to visit.....but you can only afford to live there if you work for the government.


Well.....or....if the government is paying you to live there.


They have the little cards they pass out......it's free!

max2205's picture

But but the avg savings acct has 750 dollars...guess that was spent before Christmas. ....so now what?

DutchR's picture

Government statistics are made by monkeys with crayons, unreal no.

Red Irish Mist's picture

Nope, they are made by climate scientists. Exactly the same sort of statistical acrobatics are required. There's lies, there's damned lies and then...........

piratepiet's picture

hmm, not sure what to think about your references to "the tribe".  I guess a large part of ZH posters belong to "the tribe".  

Ahoy Polloi's picture

Tribe = Washington [RED]Skins. Which 'some' might correlate as being 'foreskins' as the case may suggest in practice. Anyway ~ I'm sure you're much smarter than me, so I'll leave it up to your massive, inquisitive, rectifying, & pallbearing intellect to figure out.



On this ~ "I guess a large part of ZH posters belong to "the tribe"."


Well, if your definition of 'large part' = 2%. Then you would be correct.


Happy Festivus

GetZeeGold's picture



Hmmm....the tribe?


Never heard of it.

pelican's picture

Danny, how would you like to come over and mow my lawn? Hmm Hmmm Hmmm?

Manthong's picture

"It's easy to grin

when your ship comes in

and you've got the stock market beat.

But the man worthwhile

is the man who can smile

when his shorts are too tight in the seat"

-Judge Smails

Buckaroo Banzai's picture

Danny...I've sentenced boys younger than you to the gas chamber. Didn't want to do it. Felt I...owed it to them."

Coke and Hookers's picture

Liesman has an incredible appropriate name for his job. It's like someone with the name Carpenter was actually a carpenter.

Skateboarder's picture

Or a <first name> Smith being an actual smith of something, etc. Wowza, what a 'retro' world that would be.

GetZeeGold's picture



Stop making fun of Steve........HE'S A HUMAN!!!!


We don't have a video yet.....just use this one til we do. Hopelully this won't inflame the Muzzies.



GRDguy's picture

What about having a senator named Flake, or someone from LaHood as past Secretary of Transportion.

I know you can't choose your name, but how do these names even get started.

pelican's picture

Don't forget withdrawing from their 401k.

Peter Pan's picture

Time for a joke.


Man walks into a bar. He is looking in his pocket for a lighter and the guy next to him offers him his, which is a BIC lighter that is 12" long.

Guy lights his cigarette and asks how he got such a big lighter.

The guy tells him it was from a genie.

The other guy tells him that he does not believe him.

The owner of the lighter pulls out the magic lamp and tells the guy to speak loudly because the genie can't hear too well.

The guy rubs the lamp and the genie appears asking him what his wish is.

The guy asks for lots of money.

Next thing you know the bar is full of honey.

He turns to the owner of the lighter and says, "but I asked for money not honey."

The owner of the lighter responds, "and do you think I asked for a 12" BIC?"

GetZeeGold's picture



Proof positive dick jokes always work.....no exceptions.


Sex sells.....and propaganda is right up there as well.





Remember this?


junction's picture

Obummercare, the gift that keeps on giving.  Wipe out the Democratic Party? Check! Enrich giant health insurance like Blue Cross and Humana? Check! Enable drug companies to price new "miracle" drugs at up to $1,000 a pill? Check!  Do anything about the soaring rates of MRSA and Clostridium Dificile in pesthole hospitals? Negative!  Investigate the marketing of defective vaccines? Negative!  Place salary caps on the multi-million dollar salaries of non-profit hospital administrators? Negative!

artless's picture

I'll have to upvote that but take exception to the wipe out the Democrat (and its' DEMOCRAT! not Democratic) Party.

Ain't going nowhere. The Repubes would never let that happen because...

THEY ARE THE SAME FUCKING ENTITY.  And anyone who does not realise this is a fucking moron or worse. How'd that recent election work out for all y'all? Woo hoo! Red Team gonna ride into town and clean up the big mess! What was THE FIRST thing they did? A fucking spending beill that ass rapes every last person in this country by selling them out to the parasites and further indebting them, their kids, their UNBORN kids, and probably their kids as well.

Until BOTH the RNC and the DNC are relugated to the dustbin of history (preferably a very hell-like dustbin) NOTHING will change. They are both criminal entities with a monopoly on government because of ELECTORAL LAW (note here NONE of which is in the Constitution). The only differnece between The US and Soviet Russia is the numbers of names on the ballot. Until there is a way to vote noor dissolve a current republic such as in parlimentarian systems OR allow for full and equal ballot access it's all a fucking side show for the sheeple to keep them lining up "to be herded heard".

Also salary caps are just another tool of state control. Which is, if one has the ability to comprehend facts, the REASON "healthcare" is what it is here in the good 'ole United States of Fascist America.

Neverstopprintingme's picture

ZH...enough already!!!! There is no equity bubble. The increase in the monetary is pernanent.  All this other stuff is simply noise.  Krugman won and they will continue to expand the monetary base in perpetuity. Rational thought left the fed and government institutions in late 1989.  It's over.  Go long or go home.

Coke and Hookers's picture

I see in one them figures that people still have some savings so the job isn't done yet. MOAR monetary expansion until savings+hard assets=0 for the 99,9%. You can take that equation to the bank bitchez.

Freedom Pilot's picture

"If you like your retirement account, you can keep your retirement account."

Realname's picture

The gov says if WE like your retirement acct WE'LL keep your retirement acct...and anything else they damn well like.

DetectiveStern's picture
"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered...I believe that banking institutions are more dangerous to our liberties than standing armies... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."


 Thomas Jefferson

augmister's picture

Sorry, look it up on the Monticello web-site...he did not say.

o2sd's picture

Thomas Jefferson was rich wine snob who was sick of paying taxes to the Brits. So yeah he wrote some lovely words and aroused the rabble, who went out and died for those words while he sat back, drank his wine and fucked his slave girl.

Stormtrooper's picture

The BEA wasn't totally lying.  I helped them out by dipping into my savings to spend.  Now I have some more barbaric shiny yellow stuff lying around.

thatthingcanfly's picture

Well, it's been a month, and it turns out I'm revising down my previous schlong measurement by 6 inches.

My new current measurement is 12 inches, thereby showing 100% growth (based on revised last month's data).

Who wants to invest in me?

Government needs you to pay taxes's picture

Got a call center job that fits you like a glove.  1800-THE-TOOL.

Winston Churchill's picture

I never fold mine in half for silly contests.

scrappy's picture

Cuba could use a superman act for the touristas.

green888's picture

I wish mine was twelve inches long, rather than this dam great thing I trail around with

falak pema's picture

hey its Xmas especially in the statistics bureau ! 

kowalli's picture

real USA GDP 4-7tn.

Dr. Engali's picture

Why does it matter? Nobody cares about the truth as long as the fed is backstopping the market.

disabledvet's picture

Japan,Europe....backstop the market but fail.


If you're shorting and get a thousand point melt up WITH an energy price collapse you really can't win for losing.

Shorting treasuries too?  Did interest rates soar on the huge GDP print.

The "economy" is smarter than that.  It understands the costs/prices for everything has gone up.  With wages stagnant hard to see where a consumption boom is coming from...let alone a savings boom.

djsmps's picture

Well, according to the HuffPost, the amazing increase in GDP is due to President Obama. As are the amazingly low gas prices. And everyone has a job because of him.