US Economy Grinds To A Halt, Again: Q1 GDP Tumbles Below Expectations, Rises Paltry 0.2%

Tyler Durden's picture

And so the Atlanta Fed, whose "shocking" Q1 GDP prediction Zero Hedge first laid out nearly 2 months ago, with its Q1 GDP 0.1% forecast was spot on. Moments ago the BEA reported that Q1 GDP was far worse than almost everyone had expected, and tumbled from a 2.2% annualized growth rate at the end of 2014 to just 0.2%, in a rerun of last year when it too "snowed" in the winter.  This was well below the Wall Street consensus of a print above 1.0%.

In other words, in the quarter in which the S&P rose to unseen highs, the economy ground to a near halt.

Only this time it wasn't the snow, as the main reason for the plunge in economic growth was not only personal consumption which was cut by more than 50% from last quarter, tumbling to just 1.31%, but fixed investment, i.e., CapEx, which subtracting 0.40% from the bottom line GDP number, was the lowest print since 2009!

 

The fact that trade also subtracted a whopping 1.25% from the final number shows that while one can blame the weather for anything, the reality is that in the start of the year global trade did indeed grind to a halt, a picture which is only getting worse with every passing day.

The only good news: the massive inventory build, the largest since 2010, boosted GDP by nearly 3.0%. Without this epic stockpiling of non-farm inventory which will have to be liquidated at some point (and at a very low price) Q1 GDP would have been -2.5%.

Here is the full breakdown of the GDP number:

 

And a historical breakdown showing that the Q1 "snow in the winter" curse is alive and well.

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timeless21's picture

It's the weather, stupid......oh wait...

VinceFostersGhost's picture

 

 

US Economy Grinds To A Halt

 

Mission Accomplished!

flacon's picture
Merrily, merrily, merrily, merrily,
Life is but a dream.
Shocker's picture

Always something, just face it we are not in a recovery

Layoff List: http://www.dailyjobcuts.com

-

NoDebt's picture

If GDP had printed at +3.2% would you have believed it?

Then why do you believe this number?

This is all to push Fed interest rate increases out further on the calendar.  GDP numbers are meaningless drivel and are a "policy tool" as Doc Engali often says, just like the S&P 500 level is a policy tool.

Manthong's picture

No problema as long as they use unlimited paper to sell VIX down to zilch

 

Manthong's picture

GDP..(e)Gregious  Dumbf’r Phantasm

BraveSirRobin's picture

It's true - winter was completely unpredicted this year. Who new we would have a winter?

Max Cynical's picture

That's what they're reporting...so what's the real number?

-5.0%, -10.0%?

NoDebt's picture

There is no real number.

Lone_Star's picture

I tend to agree.

I'm having trouble seeing how anyone other than the dock workers are stockpiling inventory. We've been having delays of over a month on both imports and exports on the West Coast. They got so bad at one point that we re-routed to the East Coast. This is for perishables, so delays mean we take the loss.

Nobody For President's picture

You nailed that one, nodebt...

SERReal1's picture

There is no confidence in this number whatsoever. All they do is keep adding items to the GDP calculation to try and prop it up. Just imagine what the numbers for the past year would have looked like if they took out the expenditures on health insurance (Obamacare). I can't wait until the revised number comes out and heads even lower.

XAU XAG's picture

And that is with Hookers and Blow! LOL

 

We have been on the outskirts of an Eddy for a long while and while they keep trying to stop the flow from going into the middle and flowing down the plug hole............the only thing that would work is no taxes.

 

Large Debt is the real holdback on any economy.

 

 

New Kid's picture

They should start including income from panhandling in GDP figures., The new growth industry.

indygo55's picture

Mission Accomplished!

Right! Now if we can just get all the gold and silver out of the country, trash all industry, crash the currency, leave these pathetic stupid Americans with nothing we can fly to our ivory towers in the Fuij Islands and live happily thereafter. 
VinceFostersGhost's picture

 

 

That was suppose to be a secret.

XAU XAG's picture

GROWTH

HAS

BEEN

AWOL

FOR

A

LONG

TIME

XAU XAG's picture

TAX

Stands for

 

TAX

AGAINST

XPANSION

dizzyfingers's picture

STAGNIFICATION!!!!!!!!!!!!!!!!!!!!!!!!!

knukles's picture

So some dolt from Barclays (? or wherever) on CNBS said that their forecast of +1.8% was right in line with what was printed at +0.2%.
Everybody shook their heads; yah yah yah yah yah
Does anybody but me see what happened?
Santelli is a God.  He's a Bond Guy.  That's Why.

Toolshed's picture

"Santelli is a God.  He's a Bond Guy.  That's Why."

That's the funniest crap I have heard today! Santelli is a hysterical niwit. Even a broken clock is right twice a day...............which is more often than Santelli.

Philo Beddoe's picture

I think Santelli is pissed because the Fed refuses to let the clock run wthout them pushing all of the hands. 

VinceFostersGhost's picture

 

 

Santelli is a hysterical niwit.

 

Which is why I joined the Joe Kernen cult instead.

NoDebt's picture

What?  No Andrew Ross Sorkin fans around here?  That's hard to believe.

TruthInSunshine's picture

Becky Quicky in the tub with Grandfather Buffett.

Maria Big Ass Worn Loose Badonkadonk Caboose Bartiromo going down on Jeff Immelt en route to Basel at 30,000 feet.

SoilMyselfRotten's picture

You can't trust these (bad) numbers

onewayticket2's picture

dont worry, they'll be revised down to negative....

knukles's picture

Bad numbers happen to good economies.
Krugmainiam Ecoonomics

Handful of Dust's picture
GSK closing Pittsburgh office, putting 275 jobs at risk

 

The big asset swap between GlaxoSmithKline ($GSK) and Novartis ($NVS) may have given each company just what it wanted, but the deal continues to play out poorly for workers, with GSK planning to close its Pittsburgh office where it has about 275 employees working for its consumer health unit.

 

http://www.fiercepharma.com/tags/layoffs-0

pods's picture

Closing down RTP R&D as well, and moving them up to Philly.  Nice campus down here.

So much $$ in big pharma now that M&A is the easiest way to get ahead.  Find company with pipeline, buy company with cash from Blockbuster drugs, profit.

Same thing Pfizer did with Wyeth.  

GSK and Novartis was more like a swap, but M&A rules the day almost everywhere now.

pods

Son of Loki's picture

M&A's are a great way for Big Corp to:1) cut jobs, and 2) amend pension plans to cut benefits.

 

very bullish for CEOs and shareholders!

 

not so much for workers getting "restructured"

New Kid's picture

Arent these mergers of giants anti-competitive or something?

TPTB creating more monopolies and cartels and TBTF companies like there is no tomorrow... Maybe there is no tomorrow.

Hyjinx's picture

It was a sad day when Wyeth got bought up by Pfizer.  From the inside Wyeth was a great company targeting important diseases, not developing boner pills.

doctor10's picture

most of this is O'care.  It was supposed to re-collateralize the insurance companies with 30 million new bodies paying in-however the costs have gutted out other, better quality collateral through out the country, while there stillare -surprise surprise!!-30 million outside the system...

 

what do they do next? Prolly sit on their thumbs and continue to pleasure themselves in NYC and DC while the country starts to burn.

 

Nero Obama

LooseLee's picture

ALL of this is PINKO COMMIE FASCISM, of which OBOZO-Care is but a part....

new game's picture

BIG CONTRIBUTOR- healthcare is a blckhole siphoning money right off the top(paycheck) and sucking the last dolla at the bottom if one actually uses their heathcare insurance. second biggest fraud after the FED itself...

VinceFostersGhost's picture

 

 

It's nice to see Tiny Tim up and walking, but the side effects of the medication were brutal.

knukles's picture

Dude!  That's slick.
Reminds me of the time I was walking along 48th Street in NYC and some guy was leading another one collared on a leash with a gimp mask, barefoot, wearing nothing else but a thong.
                        Kinda like our overseers and the "news"
                          NYT: "All the news that Fits"

gmak's picture

The monkey looks a little disgruntled. Could it be where the elite is putting the stick?

Handful of Dust's picture

Excellent! Gives further menaing to the Middle Class private sector being Monkeyhammered by the Fed's + Barry's economic policies.

4 wheel drift's picture

LOL !

 

obama and his handlers in full display of the fruit of their efforts....

indeed misson accomplished....

Firepower's picture

GDP MUST be maintained at 5% for the next decade to pay off the debt and keep SS and all the Bread & Circus BIGov "programs" solvent.

 

Or the "natives" go hungry and...it's just Liberal NAZISM At Work: http://wp.me/p2kmGE-h4

SickDollar's picture

We are in recession period

 

venturen's picture

guess you aren't running a silicon valley zero revenue billion dollar company, a washington lobbyists, a scam Wall Street HFT operator or money printer. 

SERReal1's picture

How true. Anyone with any sense can see that.