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Final Q4 GDP Unchanged At 2.2%, Below Expectations; Corporate Profits Tumble
So much for the "self-sustaining", "escape-velocity" recovery. Again.
After rising at an annualized pace of 4.6% and 5.0% in Q2 and Q3, the final Q4 GDP estimate (a number which will still be revised at least 3-4 times in the coming years), slid more than half to 2.2%, the same as the second estimate from a month ago, and below the consensus Wall Street estimate of 2.4%.
There were few changes underneath the surface (as can be expected with the bottom line number not changing) however most notable was the increase in Personal Consumption which increase from 2.83% to 2.98%, with this increase more than offset by a drop in Inventories from a 0.12% contribution to a -0.10% detraction from Q4 annualized growth. Net trade ended up subtracting -1.03% from Q4 growth, compared to -1.16% previously. Finally, fixed investment and government spending were virtually unchanged.
But the worst news was the following:
For the year 2014, profits from current production decreased $17.1 billion, in contrast to an
increase of $84.1 billion in 2013. Profits of domestic financial corporations decreased, and profits of
domestic nonfinancial corporations increased. The rest-of-the-world component of profits decreased
$9.0 billion in 2014, in contrast to an increase of $1.3 billion in 2013.
While this has to do a lot with the CCAdj and IVA adjustments we profiled previously...
According to the measure of profits before tax with inventory valuation adjustment, profits of domestic financial corporations decreased $13.0 billion in the fourth quarter, in contrast to an increase of $16.2 billion in the third. Profits of domestic nonfinancial corporations increased $14.7 billion, compared with an increase of $31.1 billion. The fourth-quarter increase in profits of nonfinancial corporations primarily reflected increases in retail trade, in "other" nonfinancial industries, and in manufacturing that were partly offset by decreases in utilities and in transportation and warehousing.
Profits after tax with IVA and CCAdj decreased $135.4 billion, in contrast to an increase of $64.6 billion. Dividends decreased $54.5 billion, in contrast to an increase of $102.5 billion. Undistributed profits decreased $80.9 billion, compared with a decrease of $37.9 billion.
... the fact that profits are now declining is not what those advocating EPS growth would like to see.
In short: a number which confirms the US economy is once again slowing down, and will hit the breaks when in one month the BEA reports that Q1 GDP was at or below 1.0%, with snow in the winter getting the bulk of the ridiculous blame once again.
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BULLISH, right?
Ban snow!
Moar global warminggggg!!!
WWHHHHHHAAAAAAAAAHHH!!
Burn a Prius today!
Wow! With that scortching growth rate of 2.2% the Fed will now be forced to raise rates to cool the economy down!
[HAHAHAHAHAHAHAHAHAHAHAH!!!!!!]
Time to get the BLS busy cooking the books on the upcoming Summer of Recovery.
Bullish?
Who cares?
The first official act of every trading day is "mysterious" buying at the open.
No matter what teh newz, the fundamentals, or anythign else, the tribe will always do what it takes to make themselves feel better about themselves and that's rewarding themselves with moar stawk purchases.
2% Gains in the markets today due to this news?
Merry F'ing Christmas.
Sometimes I wonder if stawk algos crawl ZH.
= 4
What???? I is gunna buys the fucnkin dip....BTFD
Better than expected.
Flashback: "if you pass this $787,000,000,000.00 stimulus, we will have 4% GDP in 2010!" obama, 2009
He neglected to mention what % of the projected 4% GDP 787,000,000,000 represents.......
Obama thinks 4%. Reality says 0%
Unchanged = Keeping that crock of shit on simmer.
Wave buh-bye to growth in your rear-view and hit the gas!
Corporate Profits after taxes fell by 8.29% in 2014.
You cannot spin that because that IS the bottom line.
Any claims that we are still recovering should now come to an end.
That's the worst four quarter performance since the four quarters ending in March 2009.
Wait, does that mean it's the worst fourth quarter performance since Lehman?
I'd like to look at it prior to the recession.
And this is just about where we were with the four quarters ending December 2007 (-7.64%).
We know what happened next.....
Here's a link to a quick chart I created;
http://ejmoosa.tumblr.com/post/114753978174/corporate-profits-after-taxes
A simple soft ball for the un-fed. Found on page one, 2nd. paragraph of the Bankster script.
" We are seeing some minor transitory weakness in some areas" "Going forward the underlying strength continues to build as expected".
You can't stay up all night with the promise you won't die during the day.
It's all part of the plan.
Controlled chaos.
The JOKER says buy.
Maurice?
George?
appearantly, steve liesman now finds GDP "overrated".
constant, non-stop central-bank intervention is all thats necessary. the slow-down in the U.S. economy will now be directly attributed to the ending of QE.
my how fucking upside-down this world has become. continue to steal from our children, grandchildren, great-grandchildren so we can borrow enough $$$ to buy the new iphone, get a bigger house, better car all so we feel better all-while continuing to mask the underlying problem which is this $18 trillion & growing debt.
unconcienable.
A positive development would be when steve liesman finds breathing to be "overrated"
Unfortunately, the "non-stop central-bank intervention" of which you wrote is all that we seem to have. Strangulation by regulation, be it Obamacare, EPA rules, or whatever, prevents any recovery by normal business processes.
Love from the water company yesterday 6.95% increase next month. Inline with Shadow Stats (endorsed by Paul Volker BTW) inflation rate of 7-9%. Soooo even if you believe the BS that Nominal GDP grew 2.2% in Q4 that still means the economy CONTRACTED by ~5-7%. Pretty damn bad when all the media buttheads keep up with the chant of an improving situation.
Keep Stacking
Increasing trend for state and local taxes and fees to bridge budget gaps. They will get paid one way or another.
Don't forget to pay your mortgage and property taxes on time. Oh yea! and the water and sewer bill. They can put a lien on your property for that one too!
Get yourself a private well and a septic tank. Stop drinking the government water and stop pissing in the government toilet.
Thats because they hedonically adjust the cost of water to the cost of piss.
Without the 2 million desperate immigrants flooding into the country every year,consuming,procreating,and putting a "put" on everything from housing,to baby diapers,we would have seen a real GDP number of -3%..
Hooray for forced healthcare! Otherwise well below 2%. Just think...the dollar value for GDP increase was $650 Billion for all of 2014. Total debt only increased by $2 Trillion. A mere $3 of debt for every $1 of GDP growth. Bullshitish.... Uh Bullish...
"slid more than half to 2.2%"
Funny what numbers get revised to when their useful propaganda life span winds down......
hit the breaks
lulz
The US is no longer a strong religous nation, people just arent buying as many christmas presents, sacrilegious.
Tesla!
Shenanigans. I bought everything since October on a credit card and haven't made one payment yet!