Here Is The Reason For The "Surge" In Q3 GDP

Tyler Durden's picture

Back in June, when we were looking at the final Q1 GDP print, we discovered something very surprising: after the BEA had first reported that absent for Obamacare, Q1 GDP would have been negative in its first Q1 GDP report, subsequent GDP prints imploded as a result of what is now believed to be the polar vortex. But the real surprise was that the Obamacare boost was, in the final print, revised massively lower to actually reduce GDP!

This is how the unprecedented trimming of Obamacare's contribution to GDP looked like back then.


Of course, even back then we knew what this means: payback is coming, and all the BEA is looking for is the right quarter in which to insert the "GDP boost". This is what we said verbatim:

Don't worry thought: this is actually great news! Because the brilliant propaganda minds at the Dept of Commerce figured out something banks also realized with the stub "kitchen sink" quarter in November 2008. Namely, since Q1 is a total loss in GDP terms, let's just remove Obamacare spending as a contributor to Q1 GDP and just shove it in Q2.


Stated otherwise, some $40 billion in PCE that was supposed to boost Q1 GDP will now be added to Q2-Q4.


And now, we all await as the US department of truth says, with a straight face, that in Q2 the US GDP "grew" by over 5% (no really: you'll see).

Well, we were wrong: it wasn't Q2. It was Q3, albeit precisely in the Q2-Q4 interval we expected.

Fast forward to today when as every pundit is happy to report, the final estimate of Q3 GDP indeed rose by 5% (no really, just as we predicted), with a surge in personal consumption being the main driver of US growth in the June-September quarter. As noted before, between the second revision of the Q3 GDP number and its final print, Personal Consumption increased from 2.2% to 3.2% Q/Q,  and ended up contributing 2.21% of the final 4.96% GDP amount, up from 1.51%.

So what did Americans supposedly spend so much more on compared to the previous revision released one month ago? Was it cars? Furnishings? Housing and Utilities? Recreational Goods and RVs? Or maybe nondurable goods and financial services?

Actually no. The answer, just as we predicted precisely 6 months ago is... well, just see for yourselves.

In short, two-thirds of the "boost" to final Q3 personal consumption came from, drumroll, the same Obamacare which initially was supposed to boost Q1 GDP until the "polar vortex" crashed the number so badly, the BEA decided to pull it completely and leave this "growth dry powder" for another quarter. That quarter was Q3.

Source: Q3 GDP report: second revision, Q3 GDP report: final revision

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ekm1's picture

Easy peasy.

Western countries must simply allow deadly pandemics to achieve 200% GDP in 6 months

SoilMyselfRotten's picture

Yeeeehaw, the Santa rally is gonna fly right down yer chimney now


Manthong's picture

It’s just a good thing all that Obamacare GDP boost goes to the insurance industry, pharmaceutical industry and government and not to discretionary consumer spending.

Obama prosperity..  for the 1 per cent.

Fish Gone Bad's picture

Spending a tremendous amount of money on healthcare is just not ... healthy.

SofaPapa's picture

So the more people spend because they are ill, the greater our productivity.  Orwell is smiling somewhere...

BaBaBouy's picture

Smoke And Mirrors, And Obama ...

Took Red Pill's picture

The Affordable Care Act in action!

Dollarmedes's picture

Assuming the government isn't completely dishonest, and doesn't try to double-count the Obamacare contribution to GDP, then this "fudge factor" won't be available for Q4. Although there is usually a seasonal spike in employment, low oil prices may counteract that as fracking wells get capped and oil industry unemployment increases. If the fudge factor isn't available, Q4 could be pretty bad. Does that sound correct?

boogerbently's picture



Healthcare costs are down.

Healthcare costs raised GDP.

Hey, whatever you need to hear at the time.

Never One Roach's picture

I'm sure the 15% plunge in Christmas shopping will be very Bullish for the GDP.

Save_America1st's picture

what's it gonna be next quarter...hookers and drugs????

How about caskets and funerals from all the dead banksters????  That's gotta be generatin' some good GDP right there.


knukles's picture

Ummmm   This stuff is really beginning to make my gonads shrivel when I see it.



Save_America1st's picture

Saul Alinsky's 8 levels of control to create a social state.  Note what big 'ol #1 is.  And now it's part of the GDP!!!


How to create a social state by Saul Alinsky: 

There are eight levels of control that must be obtained before you are able to create a social state. The first is the most important. 

1) Healthcare – Control healthcare and you control the people 

2) Poverty – Increase the Poverty level as high as possible, poor people are easier to control and will not fight back if you are providing everything for them to live. 

3) Debt – Increase the debt to an unsustainable level. That way you are able to increase taxes, and this will produce more poverty. 

4) Gun Control – Remove the ability to defend themselves from the Government. That way you are able to create a police state. 

5) Welfare – Take control of every aspect of their lives (Food, Housing, and Income) 

6) Education – Take control of what people read and listen to – take control of what children learn in school.  <<<--- Common Core

7) Religion – Remove the belief in the God from the Government and schools 

8) Class Warfare – Divide the people into the wealthy and the poor. This will cause more discontent and it will be easier to take (Tax) the wealthy with the support of the poor. 

They're running their treasonous playbook by the numbers and every one of them at the same time. 

willwork4food's picture

No need to worry about the 15% plunge in Xmas spending at malls. Look at the 25.745% rise in beer/spirit consumption.

Obviously this is bullish.


  • (buuuuurrpp)
Crush the Infame's picture

Saul Alinsky didn't write that.  All of this focus on Obama is dangerous, and I'll tell you why:

1) It reenforces a false idea that if it weren't for Obama all of the corruption would disappear.  This apple is rotten to the core and swatting one bug off of it isn't going to make it edible. 

2) It supports the thinking that Republicunts would have done anything different and/or will do things differently if they can win future elections. 

3) It allows your opponents to dismiss your other arguments as racist extremism.  George W. Bush and Obama have almost identical ideologies with the exception of abortion and gay rights, two issues that mean nothing to the economy, so when you blame Obama but let W off the hook, what other reason is there for all this hatred? 

4) It scares off people who are on the fence about the important issues on this website (ending the Fed, sound money, attacking crony capitalism, simplifying the tax code, etc).  Some curious newbie reads an article here and thinks, "hmm, maybe these guys have some answers," only to get to the comments section and read "derp, derp, dat Obama just like Stalin, derp, derp" and think "oh, just some more crazy rednecks." 

If you complain about government but support one of the parties (even only in attacking one much more than the other) then you are an accomplice in their crimes.  America has become like a child of divorce moving back and forth between two abusive parents, somehow on each election day convincing themselves that moving back in with the other parent will stop the abuse, and somehow forgetting why they left them in the first place.  

Blaming Obama for everything is the war cry of the Republicunts and so whether you identify with them or not, when you join in, you are echoing their message.  If you are naive enough to think that the GOP will ever end the Fed, To Big To Fail, debt bubble economics, or crony capitalism then I guess you deserve what you get when you cheer them onto victory some Tuesday in November. 

SAT 800's picture

It's sounds correct to me; it makes sense; but what's actually going to come out the other end of the governments sausage making machine; I have no idea.

SokPOTUS's picture

Us.  We Are the Sausage.

ILLILLILLI's picture

>> So the more people spend because they are ill, the greater our productivity.  Orwell is smiling somewhere...


"Sickness is Health."

orez65's picture

"Sickness is Health."

Lying is Truth.

Digging and filling holes improves our standard of living.

Decorated paper is money.

Teacher unions represent the students.

What the he.l, fu.k it all!!

Save_America1st's picture

Except now people aren't spending more because they are "ill" per se....they are spending more because the gov-scum has taken over the sector, driven up rates exponentially, and steals money directly from those who don't willfully pay for this shit.  And like I said quarter they'll be counting hookers and drugs in the GDP...But even counting o-fuckyou-care is less legitimate than that. 

Captain Chlamydia's picture

Darwin is crying somewhere......

willwork4food's picture

Darwin Awards for all of Congress!

toady's picture

I KNEW Obamacare would save us all!

aVileRat's picture

You won the internet for today. Thanks for the laughs.

Goldilocks's picture

"Obamacare" Ukrainian organ harvesting...
(Jim Willie &) Andy Hoffman on Caravan to Midnight Show – December 19, 2014 (MP3- 2:53:33)

Save_America1st's picture

thanks for that link!  I had been trying to find it but didn't look on the Miles Franklin site...duh!  ;-)


Eirik Magnus Larssen's picture

The capacity of right-wing nuts for unhinged conspiracy theories never ceases to amaze me.

SeattleBruce's picture

Directly related to left winger insanity. Bring on the centrists!

PoliticalRefugeefromCalif.'s picture

It looks like they have finally realized they can engage in the hypothecation of data.. hey it works for investment vehicles, why not for GDP fluffing?

- it's not like anyone is going to call them on it..

winchester's picture

@ ekm1 :

just been to local supermarket with wifey for fucking  christmas stuff... the masse that go same time buy same shit... i knew there was an world wide overpapulating, but today i definitivly visualized it.


i wanted a gun, put barrel up, shot twice to shout 'em fucking go home you too much !!!


fucking fat fucks bumping into you, go with carts in all ways, letting em middle paths... fucking insane,  the basic human think he is alone on earth, and do not estimate neither care about his mates, this is a problem.



Miffed Microbiologist's picture

Probably the result of too many meds courtesy of our glorious healthcare. Praise him for helping the GDP.


knukles's picture

Snorting very finely ground Vicodin can getchur edge up.  What's needed is to win the Supermarket Sweep and first raid the pharmacy for all the Marinol and Lorazepam which'll chill the huffing stuffing.

Pumpkin's picture

Though I completely agree, my suggestion is to take a few more drinks until you pass out.

Consumerism = forget Jesus Christ at Christmas

PhilofOz's picture

My dear old granny used to say "Oh that's just the drink talkin'!" when grandpa got riled up about something. But yes, agree fully with what s/he is trying to convey. As for Jesus Christ at CHRISTmas, I went to the three biggest department stores here to get just to get some Nativity scene figurines to hang on our Christmas tree and found nothing!! Had to go to a little gift store run by a Chinese lady to find anything at all. "They" really are trying their bloody hardest to delete Jesus Christ entirely from Christmas.

mt paul's picture

santa clause

is the consumers christ

Joe Tierney's picture

Everybody knows there ain't no sanity clause....

knukles's picture

Dude, regardless of whether one is or isn't, likes it or not, Christianity is under siege, worldwide, while apologists abound for the Religion of Peace....
Your Progressives at Work

darkpool2's picture

Lots of nativity and general xmas stuff on sale here in Vietnam....and cheap too.! Not exactly known as the center of the Christian universe.......but hey, guess at least the amerikans left one good legacy over here.

Tapeworm's picture

That was the French bringing Christianity to VietNam.

kappal_toba_dhurr_ne_thook's picture

I am not a Christian but what you wrote is sad.  USA is becoming an atheist police state.  We are glad we left.

kappal_toba_dhurr_ne_thook's picture

I am not a Christian but what you wrote is sad.  USA is becoming an atheist police state.  We are glad we left.

northern vigor's picture

My daughter the nurse has her own apartment now...I wanted to buy her a nativity scene. Preferably one as nice as I bought my wife 25 years ago.

There were none this year.

In a few years we will receive the real Christ in all His glory.


tiwimon's picture

I can say for fact working for a hospital on the financial side of things that while it's in "Healthcare" its not actually being spent on healthcare as in money to hospitals or services or product - this boost was for insurance companies and the tech companies that built up the websites and systems to implement it.

SeattleBruce's picture

Yeah, recall during the "debates" those charts of the dozens of additional layers of bureaucrats being added to "healthcare" delivery. Hey someone's got to pay for all those salaries. Ridiculous.

logicalman's picture

My healthcare program.....

Eat real food.

Exercise every day.

Get plenty of sleep.

Cheapest and no unpleasant side-effects.



cynicalskeptic's picture

Spending a tremendous amount of money on healthcare is just not ... healthy.


Considering that most of that spending goes to insuarnce companies, pharmaceutical companies, hospital owners and other 'non direct care providers'  (who are all making record profits) instead of actual providers like DOCTORS is there any wonder it's so damn expensive?

The US spends more healthcare money NOT providing actual care of patients.

But then you still CAN get a free Rascal Scooter from the gov if you're morbidly obese - makes it easier to get around Walmart.