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US Economy Grew Less Than Expected In Q2: Worst Economic Recovery Since WWII Revised Even Weaker
The much anticipated Q2 GDP number with prior revisions is out and, as expected, Atlanta Fed's 2.4% estimate was once again nearly spot on, with the advance release coming in at 2.3%, below Wall Street's consensus estimate of 2.5%. But more importantly, as part of the annual revision to prior GDP data, one which as we observed would include the infamous "double seasonal adjustments", both Q1 2014 and 2015 GDP prints, the "winter" collapse, was revised well higher, with Q1 2014 increase from -2.1% to -0.9%, while last quarter's final GDP which had printed at -0.2% is now 0.6%.
The breakdown by revised component:
And the culprit: the capex recovery is officially dead - fixed investment as a % of GDP dropped to the lowest since Q2 2012.
From the report:
Real personal consumption expenditures increased 2.9 percent in the second quarter, compared with an increase of 1.8 percent in the first. Durable goods increased 7.3 percent, compared with an increase of 2.0 percent. Nondurable goods increased 3.6 percent, compared with an increase of 0.7 percent. Services increased 2.1 percent, the same increase as in the first quarter.
Real nonresidential fixed investment decreased 0.6 percent in the second quarter, in contrast to an increase of 1.6 percent in the first. Investment in nonresidential structures decreased 1.6 percent, compared with a decrease of 7.4 percent. Investment in equipment decreased 4.1 percent, in contrast to an increase of 2.3 percent. Investment in intellectual property products increased 5.5 percent, compared with an increase of 7.4 percent. Real residential fixed investment increased 6.6 percent, compared with an increase of 10.1 percent.
Real exports of goods and services increased 5.3 percent in the second quarter, in contrast to a decrease of 6.0 percent in the first. Real imports of goods and services increased 3.5 percent, compared with an increase of 7.1 percent.
Real federal government consumption expenditures and gross investment decreased 1.1 percent in the second quarter, in contrast to an increase of 1.1 percent in the first. National defense decreased 1.5 percent, in contrast to an increase of 1.0 percent. Nondefense decreased 0.5 percent, in contrast to an increase of 1.2 percent. Real state and local government consumption expenditures and gross investment increased 2.0 percent, in contrast to a decrease of 0.8 percent.
The change in real private inventories subtracted 0.08 percentage point from the second-quarter change in real GDP after adding 0.87 percentage point to the first-quarter change. Private businesses increased inventories $110.0 billion in the second quarter, following increases of $112.8 billion in the first quarter and $78.2 billion in the fourth.
Real final sales of domestic product -- GDP less change in private inventories -- increased 2.4 percent in the second quarter, in contrast to a decrease of 0.2 percent in the first.
Some further notes from the WSJ, which observes that "the economic expansion--already the worst on record since World War II--is weaker than previously thought, according to newly revised data."
From 2012 through 2014, the economy grew at an all-too-familiar rate of 2% annually, according to three years of revised figures the Commerce Department released Thursday. That's a 0.3 percentage point downgrade from prior estimates. The revisions were released concurrently with the government's first estimate of second-quarter output.
Since the recession ended in June 2009, the economy has advanced at a 2.2% annual pace through the end of last year. That's more than a half-percentage point worse than the next-weakest expansion of the past 70 years, the one from 2001 through 2007. While there have been highs and lows in individual quarters, overall the economy has failed to break out of its roughly 2% pattern for six years.
The latest revision, however, did significantly upgrade what was seen as a historically wretched winter of 2014.
The upward revision to the first quarter of 2014 was largely due to revised data on construction spending, specifically on power structures. The revision reflected both new seasonal adjustments and newly available data.
That 2011 figure, and other data, could be revised in future years. Commerce Department officials are undertaking a comprehensive review of GDP data with the intent of refining the seasonal adjustment process.
And while the historical revisions will surely draw many snickers among those who fail to see any difference between the US and Chinese Departments of Truth, especially since the Q2 GDP number will be will be revised as the Fed sees fit in just one month to fit the rate hike narrative, what is most troubling was the downward revision to prior years, with GDP in the 2011-2014 period now said to be growing at a 2.0% pace, significantly below the 2.3% reported previously.
The worst "economic expansion" in history was even worse than previously expected.
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Common Core GDP...
All the believability of a Chinese accounting statement.
Who exactly is the government trying to decieve? Anyone with a brain knows these numbers are BS and everyone else is waiting for football season to start.
Perhaps the 90% Kardashian watchers who don't have MUCH brain?
95% of the sheeple don't even know what GDP is or means.
And they don't care nor want to know either.
But if CNBS says it's a good number bout sumtin... then all is well.
Fact is... the average American... isn't.
And nobody took better care of their economic expansion than the Fed, According to the fed.
Like well is just another hole in the ground, that kind of well?
Fact is... the average American... isn't.
This calls for a Mark Dice video. I'll sell you this gold eagle for $50........OK......$49.
I hate repeating this. Who cares about the breakdown in categories etc? The actual/accurate GDP will only be revealed when/if the gov't uses an accurate deflator percent (around 7-8% would be close). Until then we can discuss meaningless categories and numbers until we are blue in the face and it still won't reveal reality.
Nailed it.
Well okay then time for a rate hike.
"Obama encouraged Kenyans to “choose the path to progress”
====
If they only knew.
jb
The category breakdown goes a long way to demonstrate lying.
For instance, in the second chart, look at how often exports has shown growth despite the fact that we're living in a global economic slowdown and a strengthening dollar.
How exactly can export contribution to GDP possibly be growing in such conditions?? I say that's impossible, literally impossible. Who are we exporting to, no one is buying and no one can afford dollars.
Except that these numbers, being massaged, are meaningless when it comes to drawing accurate conclusions. How can we arrive at reality if the numbers we use are skewed? Answer- we can't and so it is an exercise in futility.
There's certain things that even numbers can't hide. We know the world economy is slowing down. We know much of this has to do with the population bubbles in much of the west, China, and Japan, etc. We know the dollar is strengthening (one thing they can't hide). I don't need accurate conclusions from real data to conclude that their numbers are bullshit. The fact that their numbers are bullshit tells me a lot.
Yes. The BS can show that it is BS but they are not managing our perceptions....they are managing the perceptions of those who don't ask that next question. The perception of the 'unbaptized' so to speak. At the risk of posting too much, I share below some of my past posts on the subject of perceptions:
by r101958
on Sat, 04/16/2011 - 14:38
The two political parties are really one party....and only really end up distracting us from the truth and getting us to argue with each other. As well, there is so much selling of recovery koolaid going on out there that it is really hard to fathom how people who don't do their own studying can possibly understand what is going on. Worse yet is the fact that the folks in the gov't are so wrapped up in their own worlds where perception means everything and substance counts for squat that they don't realize that we are in a situation that can not be corrected by perception. I have a question for them; how many of them have ever run out and bought a car/house with a pocket full of perceptions?
by r101958
on Thu, 04/28/2011 - 09:23
The economy has been in the schmidt hole since late 2007. The rest of this noise has been a manufactured 'recovery'. Meant to create positive perceptions for those with no critical thinking abilities.
by r101958
on Fri, 07/22/2011 - 17:52
The one fact that most politicians fail to grasp is that there will be no 'closure' for the public until they know that the system has been purged of toxic sludge. In other words, most of us know that the economy is a house of cards built on sand. This will not change no matter what type of perceptions that Washington tries to create with fudged numbers and tweaked reporting. At least a large minority of Americans realize that nothing is really being addressed so long as the TBTF's have to use 'Mark to Fantasy' accounting to remain afloat, the government is spending 1.5 trillion more than it takes in and there is huge overhanging public and private debt.
r101958
Wed, 10/05/2011 - 16:42
Robo - what exactly is the value of technical analysis in a manipulated market? Currently, the markets are all about creating perceptions....not much about substance. You want true price discovery? How about we start with mark to market.....and please, none of the rationalizations about the market value not really mattering in this environment.
Wed, 02/20/2013 - 12:38 | 3260069 new r101958
Yep. It is all a matter of managing perceptions, all while allowing the TBTF's to take profits.
Or crush the commodity complex (and bonds and bank deposits) so the retail/small investor has nowhere else to go but to equities. Then when equities are sufficiently bubbled up the big boys (TBTF's) will then take out the money they are currently propping it up with leaving the retail/small investor to bite the bullet....again.
hey r101958 - thanks for that. i had actually never focused on the gdp deflator, as obvious as it may be in hindsight as a crooked tool of fudging all the nums. are there any resources you can point to online that explain it more? ie, ive learned all about the hedonic adjustments and that nonsense with cpi.. wondering if the same applies directly or is slightly different.
Actually, the best one came out just the other day - he was taking a poll on a 1% 'White privilege' tax, and about 90% of the passers by signed it...
Who exactly is the government trying to decieve? Maybe ALGOS?
It is an effort to manage perceptions.
So now recessions have been abolished as well as Equity market declines?
There can never be another recession as long as these central planning progressives are In control.
Important spelling correction, it should be Progressives with a capital "P" because otherwise it not very progressive at all.IMHO
"We all want progress, but if you're on the wrong road, progress means doing an about-turn and walking back to the right road; in that case, the man who turns back soonest is the most progressive." C. S. Lewis
Brought to you by the same people who give us mark to fantasy accounting.
The fine print at the bottm of the release says, "These results were audited by Toshiba and found to be complete and true"
reuters reported this am that the GOVT says there are no structural issues in GDP data construction--thats basically the same as china reported last week
Must.... raise..... rates..... no.... matter..... what....
Must is a tough nut to crack.
We raise rates......we all die........just so you know.
But we will talk about it.....a lot.
Except farming and weapon producing , what is our domestic product?
And as California farming died, half of the farming died with it. I don't call the freaking IPhone a domestic product.
Total BS.
The minus sign will be removed from all future Fed data.
Call it the "absolute value adjustment, seasonal"
it's an algebraic expression. when you move x from one side of the equation to the other naturaaly the sign has to change...
for those who believe this so called "data". I have an excellent investment oppurtunity in bridges
The Fed tired of basic math and has moved on to irrational numbers.
You reminded me of a T-shirt I saw for sale once. It contained the Greek letter pi and a symbol showing the square root of minus 1.
The square root says to pi, "you're irrational".
Pi says to the square root, "you're imaginary".
The ad was better than my simply describing it, because the T-shirt adorned a cute young lady with a mischievious smile.
double revised plus good!
In newspeak, the minus will become single plus good.
+10,000 You are correct.
US ECONOMY POSTS SOLID 2.3 PERCENT GROWTH RATE IN Q2
http://hosted.ap.org/dynamic/stories/U/US_ECONOMY?SITE=AP&SECTION=HOME&T...
I wonder if the BLS analysts break into circle-jerk mode when the order comes down from the Recovery of the Month Club leaders to use "double seasonal adjustments". Might even create enuf euphoria for them to suspend the porn-surfing for a couple hours...
The good news : Planet DC is sinking fast into the swamp on which it was built
http://economictimes.indiatimes.com/news/international/world-news/washington-dc-sinking-fast-adding-to-threat-of-sea-level-rise-study/articleshow/48268327.cms
Which only calls further into question the BLS NFP numbers.
But of course they want to show upward trajectory, so yeah.
HA. I still see A DEPRESSION.
Shhh, you can't tell um until we are out of it.
BLS, oops that was the Fed's profit on debt data, got put in GDP in error
Orwellian doubleplusgood seasonal adj has arrived!
pure gov propaganda lies.
Good numbers Gold down, bad numbers Gold down, So so numbers Gold down...As Paul Volcker once said " Gold was my enemy "
"We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake. Therefore at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded. The US Fed was very active in getting the gold price down. So was the U.K."
Eddie George, the governor of the Bank of England, in late 1999.
Gold is definitely not being manipulated, rather it is being "managed", semantics matter.
Potato, po-tah-toe
I tried revising my bank account up from $10 to $10,000 and the nice lady in the mortgage department looked at me like I was nuts. Well, she's really not too far off, but still....
Tyler- I could SWEAR there was an article here a month or so ago where one of the Fed banks completely discredited the double seasonal adjustment model (hyped by Liesman who is NOT AN ECONOMIST, I will remind everyone). In that article I thought the Fed had decided to delay the implementation of double seasonal adjustment as a result, at least pending further investigation. Now they're using it to report live data?
I feel like I'm taking crazy pills. Could you explain what I missed?
I Triple Dog Dare You - YouTube
http://www.zerohedge.com/news/2015-06-08/awkward-ny-fed-debunks-myth-fir...
Thank you for doing the digging. I knew I had read that somewhere- I even commented on it at the time!
So I guess it went like this: Liesman and the economists at the BEA get all worked up about this new "double seasonal adjustment" process to avoid ever posting a negative GDP print again. Liesman goes on TV and hypes it for them. The NY Fed, trying to be the "adults in the room" completely debunks it as bullshit. The BEA gives the NY Fed the middle finger and does it anyway.
Concise thumb nail sketch in a nutshell.
That was actually meant as a compliment, but whatever.
People believe what they want to believe, and YOU believed a lie, simple as that.
They also seasonally adjusted 2012-13 Q3 way down. Net, the seasonal smoothing depressed the GDP numbers.
To show an upward trajectory to warrant the coming rate hike.
That's ok. I have had people telling me the doctor on planned parenthood videos isn't talking about profit when she said they would be happy with more then break even. That whatever you sell something for IS the cost of it. Americans don't know the difference between cost and profit. How can they know what what a GDP number is supposed to be?
dealing in dead human babies? I thought only the monsters of isis were capable of such acts..
I blame the media. Literally 5 times the coverage of a mascot lion then this story. Someone was at the hunters house with a burn in hell sign and the reporter didn't ask them why they were being so hateful and trying to incite violence. Did say he understood the sentiment. Hold up the sign at PP and all the media will report on is how it's become dangerous for those who want to help women make difficult personal choices. Hypocrisy much?
made, the media as you call it is just doing it's job- keeping us all in the dark about anything of importance. seems international mega corps control the media, what else do you expect??
Its a good thing it wasnt a black panther...riots everywhere against 'racist' hunters.
In terms of the disparity in outrage shown, it may have something to do with there being 7.3 billion humans and approximately 30,000 lions. Not saying it's right.
At current rates, by 2050 projections show there being as many as 11 billion humans and African lions being extinct. Not saying it's right. But it could be.
Capital flow vs FDI ass cheek pinch.
Wed, 12/18/2013 - 10:22 | 4257074 new r101958
"Inflation? Yes, consumer price inflation is low. But what that shows is that real demand is still in a deleveraging trough. The money multiplier – the ratio of money supply to the monetary base – collapsed in 2008. It has not come back. Neither has the economy."
This is true if you believe in the inflation numbers released by the gov't. Understating the inflation rate is one of the most insidious forms of financial repression. It affects everything else. It is used to determine yearly private sector and government raises, it is used to determine cost of living increases for pensioners, SS recipients and many other things. But, even more than that it is used to determine many other gov't released statistics- GDP for one. If inflation is under reported then the GDP deflation figure is incorrect. If the gov't says inflation is at 1.5% then use that against whatever the gain is in the GDP. So, if the gov't states that GDP was up by 2.0% then the nominal gain in GDP over last year's GDP was actually 3.5%. However, if inflation is really 7% then that nominal gain of 3.5% is actually equates to a Y/Y GDP of -3.5%. Lies, lies and statistics eh?
As Bill Clinton/Eric Holder would say......Depends on what your definition of GDP is, is.......
Pure BS but remember a lie doen't last forever especially when the reality shows the opposite.
- Let's wait and see what other lie the can come up when every American is unemployment and marching to Washington DC demanding the heads of every traitor in the US government.
When I apply for a loan, can I just state my doubly seasonally adjusted income?
Yes, you can also use a "birth death model" where you can also make up bullshit. However, unlike the fed, no one will fucking believe you.
AS long as you mark down fetal tissue as an additional asset, you'll be fine.
Bullshit.
Here we go, the power of compound seasonal adjustments... The world is happy days again...
If it's a government statistic, you may as well get your news from the tabloids. These numbers are more than bogus, more than make believe. They are duplicitous. They are intended to deceive.
"Lies, damned lies, and statistics"
the deflator is pure fraud
What expansion? Crisis is getting worse and worse. It will take little while until people who just got new low wage job figure out that the cost of holding job is higher than the pay and massively leave already decimated workforce back to family basement or social or corporate welfare.
Well paying Oil and coal industry jobs are collapsing as we speak. Cost of living of ordinary people skyrocketed, food, rent,gas, utilities on the rise much faster than income ever was. Now as
China growth is collapsing their is no other way for big Wall Street scum to make money and pretend and extend the "good times". Even luxury good sales collapsed. The talk of rate increase is just to prop up dollar to collapse euro needed by Germany to export into the world of dying demand.
Game over.
The times of slaves of wage are here.
https://contrarianopinion.wordpress.com/2015/01/28/slaves-of-wage/
When this house of cards finally collapses...oh man it's gonna be EPIC!...
Global economy is toast and the US economy is growing? How so? Fiat paper and lies?
Outback steakhouse served 2.3% more blooming onions...what a recovery.
Don't forget the uptick in Toilet-Paper sales b/c of thse bloomin onions!
I believe the Obama administration is using the same accounting method that Toshiba used. Or mabye visa versa.
At the beginning of the year the rent on my sh***y, roach-infested, 2-bedroom apartment in Lake City, Florida, went from $550 to $650 per month. That's an 18.18% increase in one year. Obviously, one pays rent every month, too. So, it hardly helps that some infrequently purchased high-technology consumer durables theoretically "fell" in price or that gasoline prices temporarily decreased.
Just a tip for anyone that has roaches. Use Dupont's Advion Roach Bait Gel. Forget everything else(sprays, foggers, borax). This stuff is a miracle product. It's crack for roaches and actually works at getting rid of them for good.
"I can't live in an i-pad."
"Affirmative Action" Barry Obama is factually challenged or an outright psychopathic liar. I wouldn't believe "The Father of Lies" if he said that he was pissing on my cowboy boots. Neither do I believe anything promulgated by the Federal Government or their whores in the media.
He is the only president to be called a systematic liar by a pulitzer prize winner, Seymour Hersh. He's a liar. "conscientiously stupid" as MLK phrased.
Imports repetitively down, must be from all those factories popping up.
No Shit. Very shocked.
/sarcy
And that is after printing $4tn.
https://m.youtube.com/watch?v=FRMA0ENx-wg Spread the word not the turd!
Citizen: What's 1 + 1?
CBO: What would you like it to be?
BS BS BS BS BS BS BS
Perfect Time To Destroy Capitalism
Perfect time for the left to allow interest rates to rise, so they can wait for the inevitable reset, and then proclaim…..wait for it……”See we told you capitalism didn’t work, the little guy is getting crushed!!! Bad capitalists. Bad. ” That’s my prediction, July 29, 2015.
Then the communist Bernie Sanders wins the election. Or whatever Democrat is in the lead. All they have to do is repeat the lie: “Raising interest rates ’caused’ the economy to collapse, the mean conservatives knew this all along.”
Yes we know increasing interest rates will slow the economy. The leftists lowered rates to SPEED the economy, you'd be faking stupidity if you proclaim you don't know a slowdown will happen when interest rates go back up.
http://www.righttalkwisconsin.com/politics/feds-interest-rate-rise-will-...
If the left really wanted to be Machiavellian then they would stave off any kind of rate hike till March of '17, once a Republican is in office.
The necrophiliacs will need significantly enhanced seasonal adjustments and data "refining"... to keep putting lipstick on this pig.
@ atlas rocked that's why we need laissez faire instead of capitalism
Whoever said people have some friggin "right" to just be "born" into this world free and clear?
What we really really need is a a BIRTH DEBT. The instant they slap your churly ass and you take that first breath you owe the Federal Reserve $2,000,000.
That way, you know just where you stand on the old monopoly board. Stop the bullshit.
http://www.brillig.com/debt_clock/
So being born $56,544.43 in debt doesn't do it for ya?
Dont give them ideas!
Never think that America is 'exceptional', producing a nation of dumbed down and cluess idiots, addicted to smart phones, general celebrity nonsense and being expertly diverted into the latest transgender/gay/racist/feminist twitter storm.
The average Europeon (no spelling mistake) is just as dumb and clueless I can assure you.
The sad fact about all of this, it's just what the Elite's want.
What was that? I'm sorry, I was watching Duck Dynasty. Say again please.
Worst since 1933.
THE EMPEROR HAS NO ECONOMY
Yet there's people who delude that the Fed is on verge of raising rates.
In my own little business world we are slower than the past couple of years. The big thing I'm noticing is people aren't buying the big ticket items. Q3 is off to a hot start, so we will see.