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Exposing The Deception: How The US Economy "Grew" By $140 Billion As Americans Became Poorer
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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I'm announcing the data point that my schlong is 12 inches long.
Expect data revision in one month.
Americans?
Savings?
lol
We don't need no stinkin' savings!
Barclaycard
NFL Extra Points
Credit Card
Like Steve Liesman says, "Consumer credit is the bridge from working hard to playing hard in America!" Not savings.
Expect WalMart numbers to thrive in the coming months considering they are offering and promoting credit (everyone needs a Sony PSwhatever).
Tribe got richer, you got poorer. Any questions?
Where do I collect my ObamaCar?
They are waiting for the new model Yugo....
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).
We're buying anything but Gold...
Blame it anything but the parasitic thieving chosenites...
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!
But but the avg savings acct has 750 dollars...guess that was spent before Christmas. ....so now what?
Government statistics are made by monkeys with crayons, unreal no.
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...........
hmm, not sure what to think about your references to "the tribe". I guess a large part of ZH posters belong to "the tribe".
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
Hmmm....the tribe?
Never heard of it.
www.youtube.com/watch?v=sPZmINrmqZo (ice age)
We would love to explain all the reasons why the Fed is wrong, but they just don't want to talk about it.
Danny, how would you like to come over and mow my lawn? Hmm Hmmm Hmmm?
"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
Danny...I've sentenced boys younger than you to the gas chamber. Didn't want to do it. Felt I...owed it to them."
Liesman has an incredible appropriate name for his job. It's like someone with the name Carpenter was actually a carpenter.
Or a <first name> Smith being an actual smith of something, etc. Wowza, what a 'retro' world that would be.
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.
https://www.youtube.com/watch?v=kHmvkRoEowc
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.
Don't forget withdrawing from their 401k.
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?"
Proof positive dick jokes always work.....no exceptions.
Sex sells.....and propaganda is right up there as well.
Remember this?
YES WE CAN!!!
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!
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.
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.
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.
"If you like your retirement account, you can keep your retirement account."
The gov says if WE like your retirement acct WE'LL keep your retirement acct...and anything else they damn well like.
Good to know.
Thomas Jefferson
Sorry, look it up on the Monticello web-site...he did not say.
Got it for you: http://www.monticello.org/site/jefferson/private-banks-quotation
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.
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.
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?
Got a call center job that fits you like a glove. 1800-THE-TOOL.
I never fold mine in half for silly contests.
Cuba could use a superman act for the touristas.
I wish mine was twelve inches long, rather than this dam great thing I trail around with
hey its Xmas especially in the statistics bureau !
real USA GDP 4-7tn.
Why does it matter? Nobody cares about the truth as long as the fed is backstopping the market.
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.
What savings?
Exactly.
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.
And everyone has a job because of him.
Except for those two NY cops.
Two new job openings thanks to obama
Please tell me you clicked the huffpo link from another website.
I saw a similar story on yahoo that sent me to msnbc, and then turned out it was a Rachel rug muncher maddow story.
All the statistics juggling will not revive the real economy till malinvestments in the financial sector used for bubble creation and market manipulation is not diverted and put to job creation which is the core requirement to revive consumer demand. This is unlikely because the beneficiaries of the current crony capitalism sponsor only the politicians who do their bidding. The current financial system has to reboot for the benefit of the majority of the population.
http://www.marketoracle.co.uk/Article40231.html
Well, I don't know abou you, but I definitely spent more this month.
Merry Christmas!
'Merica spent that gasoline savings on beer, ciggys and lottery tickets for Xmas...
"Banksters : ... if more money were going to the market, then they would lose much of their value and we would lose profits because we are the ones who print money! That's why we invented inflation, to keep governments in fear and directing money back to us through the so-called Quantitative Easing Policies. [...] When money start to spread in the society 'above acceptable limits', we create financial crises to take them back. We dictate governments to take measures and apply austerity policies directing money back to us. We keep money valuable to everyone and secure our profits."
http://failedevolution.blogspot.gr/2013/12/an-imaginary-dialogue-between...
Nice observation except, they don't use 'money', they use Credit.
Money these days doesn't equal exclusively paper. It means electronic figures in a computer, credit, debt etc.
As promised recently, you can now read my Market Forecast for 2015 here:
http://www.strawberryblondesmarketsummary.com/2014/12/my-market-forecast...
Best of luck for the coming year!
nevermind...
banks in ffld cty are running out of cash...just told to "come back" tomorrow. out of cash. other branches had the same issue.
Where?
fantasyland
How much cash were you trying to pull out?
Good work Tyler.
one word BITCHEZ: MANIPULATION
The days of "MOAR" are numbered
It's a big club and you ain't in it BITCHEZ
Where is Putin and what is he doing. He's been quiet for a few days...
I was wondering how the economy grew when holiday sales are down by as much as 10%...
They'll just make up some shit to compensate for any shortfalls in the narrative. That's who they are.
But none of it matters....until it does.
These fuckers are absolutely shameless. You will drive yourself nuts ferreting out all of the lies that they spew.
Focus on the gifts you have been given, your family, your health. Be grateful. Butting heads with charlatans will drive you nuts and distract you from the things that matter.
In time we will find out that Obamacare will be sucking all the monies out of the families income.....and that more and more people will be on the free side of that deal...so our deficits wil go up....they will not be able to hide it soon...
They can't hide it now. The government backstopped health care insurers, they in turn have been raising rates, and the deficit continues to rise. It's like a merry-go-round without end. In the meantime, only the people that desperately need healthcare are in- getting it free- while those among us who couldn't afford it before- can't afford it now so they'll just seize the money from us. It's really a 4th amendment issue. Worthy of a courtroom.
Cramer is constipated, having a hard time getting the bullshit out.
http://www.cnbc.com/id/102291724
fuuuck
Thank you ZH! I assume Ministry of Madeup Number bonuses will be off the hook! When will this shit show end already!
BEA is an agency of the US Commerce Dept. and the Secy of Commerce is billionaire Penny Pritzker .... another of Oblameo's Chicago crony hacks.
Expect nothing but fraud and lies from these gangsters.
http://www.nationaljournal.com/whitehouse/four-things-to-know-about-penny-pritzker-a-billionaire-and-obama-s-commerce-secretary-pick-20130306
What I want to know is - Which bank was short oil and highly leveraged going into oil's collapse? JPM, GS, MS, BAC, WFC? A European bank? Any margin call against these banks will crush them.
All the above and moar.....you will find out when they want you to know
that idea that amreicans actually had 'savings' makes any related data hard to consider.
one wonders if Personal Income numbers from BLS, in regards to average hours worked and wages during that time period jive with these income and revised income numbers.
GDP is such a worthless statistic to begin with.
given there over the last 7 years, the number of people who turned 20, outnumber the number of people turning 70 by 14 million---I protest the idea of a recovery with the fact that full time salaried employees today is at the SAME LEVEL it was in 2007!!! 7 years of 14 million more people in workforce while NO NEW F/T jobs created????http://research.stlouisfed.org/fred2/series/LNU02500000
---alas, the continued financialization of the US economy, began in 1993.....work is redundant, borrowing is growth, savings is harmful. "I saved so much this xmas with all the stuff I bought!"
Less is more: more or less!
66% get a "credit" on their healthcare prems under Obamacare. sounds like savings all around to me! HO HO HO!!
Does the article mean to suggest
that imputed and imagined (financial) GDP "production"
coupled with redefined-away inflation
is less significant?
Anyhow, the whole national GDP business has become ever less meaningful
with the spread of global corporatism,
and the ever more obvious realization that
gross GDP "production" is not a measure of the quality of life,
and gross GDP may in fact be detrimental to the quality.
Why wouldn't I dip into savings when my bank account is yielding ZIRP and inflation is sucking my teat by at least 2%. Don't pay to save Bitchez...
There is no organic growth. So what else can the Fed and the oligarchs do? Watch it all collapse? They are 100% certain they can control the feeble minds of the masses by happy talk and loose credit. So far, they are 100% successful. Vehicle sales have exploded thanks to no-qual, low rate loans. Look around you, new vehicles in every parking lot. Home sales are mostly up and they just loosened credit there too. Yes, they push demand forward and yes it will all come apart one day. That day may be years from now. Investors all over the world are pouring money into U.S. markets. We show five times the “growth” compared to almost anywhere else in the world. A debt-driven illusion? Sure, but people don’t care. They know the Fed is trapped into supporting the markets forever, and savers are punished.
Silicon Valley and tech has been the golden area for 40 years. Thousands will wait on line in the rain, parents will sell the firstborn and people will kill each other, for a new I-phone. Soon it will fold up like a house of cards, and all will be lost. Not even direct Fed intervention in the markets will reverse the final decline. The selling will be brutal and the bankers will again deny any culpability. Patience needed.
We feel your temerity! All sane people do. Seriously, almost every single one of us has burned ourselves by predicting the consequences would come sooner than they have.
Of course, we were only half wrong. The consequences are all around us, but since all the predators and their agents spread happy faces at warp 9.999... it doesn't seem like the consequences have arrived yet.
And indeed, most of the worst consequences haven't arrived yet.
But... now pretty much all of us sane folks have adjusted our timing predictions to allow for our apparent mistakes these past several years. As a consequence, maybe now we're making the opposite mistake? Maybe the wheels will come off the cart in 2015. It sure feels like we're in the setup for that, no?
One thing is for sure. Now that we've almost entirely removed "soon" from our vocabulary... the collapse will certainly happen sooner than we claim. Because now we always claim it will be "manana" (years from now).
While I can't be sure of course, 2015 sure looks to me like the year of the [first] "big one".
If the prols won't spend, we'll FORCE them to spend! Quick, find some university jack-off to create some legislation that will be recognized by the SCOTUS as a tax, but goes directly into the pocket of some of our best political financiers...
Fudged GDP numbers haven't convinced them to spend? Huh! We'll just TAKE it from you!
Signed: Filthy political DC Thug...
"what did Americans allegedly spend the bulk of their savings on?
Obamacare."
haha, and look at the next highest category - financial and insurance
Joe 6pack is getting raped from all sides
Pay the penalty Bitchez.
People taking there money out of the bank and putting it under the mattress.
There is nothing to celebrate here. GDP (even if genuine GDP and not the hookers and cocaine variety) is largely a measure of industial inefficiency and general waste.
They are counting payment on Debt as GDP Now... /S
Look at all that paper
January going out of business, err I mean clearance sales should help next quarter. Bullish!
Most people that I know who don't follow the financial news have no clue what GDP means anyways.
Seriously? They never heard of Gross Deception Propaganda??
yet more bull dust from the people who were wanking on about 'gold going to $3000' and 'QE Infinity'. it must be sooooo hard for the 'tyler durdan' gang to accept that their home economy is growing, and better than anyone else's, and runaway inflation never eventuated, and QE isnt for infinity.
anyway, continue on with your mutual cock fondling, as usual.