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Final Q2 GDP Revision Spikes To 3.9% From 3.7% On Jump In Consumer Spending
While the final Q2 GDP revision released moments ago by the Bureau of Economic Analysis is a largely meaningless number looking at the performance of the economy some 3 months ago, it will still set the momentum for today's trade, and with its surging from a 3.7% first revision print to 3.9%, surpassing expectations of a 3.7% print, means that concerns (or perhaps hopes) for a rate hike are once again back on the table.
As the chart below shows, after printing a modest, and double-seasonally adjusted 0.6% in Q1 (originally this was negative), in the second quarter the economy is said to have grown at the fastest pace since Q3 of 2014 when the Fed was once again said to be on the verge of tightening.
The breakdown by components shows an increase in the two key items:
- Core Personal Consumption Expenditures rose by 3.6%, far above the 3.1% in the prior revision and above the 3.2% expected. It contributed 2.42% of the final 3.91% GDP annualized number, up from 2.11% earlier.
- Fixed Inventory also rose, adding another 0.83% to GDP, up from 0.66%
Net trade was largely unchanged while Inventories declined modestly, adding 0.02% to GDP, down from 0.22%.
What is perhaps ironic in this strong number, and the reason for the kneejerk reaction higher in stocks only to fade, is that the higher the Q2 GDP, the lower the Q3 number will be - as more spending was pulled forward, it means that consensus expectations of Q3 GDP will now surely drop below 2%, and begin to converge with the Atlanta Fed's own Q3 GDP "nowcast", which yesterday was revised to a paltry 1.4%.
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Baghdad Bob is more believable than US economic data
Just look at how we fix inflation:
Chapwood Index shows real inflation in US.
In 2014, it was 9.7% - 1212% of official US inflation (0.8%)
http://www.chapwoodindex.com/
The Chapwood Index reflects the true cost-of-living increase in America. Updated and released twice a year, it reports the unadjusted actual cost and price fluctuation of the top 500 items on which Americans spend their after-tax dollars in the 50 largest cities in the nation.
Even the Sheeple will not believe this
Winter is coming.
That means that people will start hunkering down in expectation of freezing weather, slick highways, bone chilling temperatures, football and lobotomies.
I'm serious.
Remember, last time around CNBS said that people stopped spending in anticipation of bad weather.
But fuck, it's all transitory, just like "Jellin' like Yellin"'s Stroke.
(Get it, Transitory as in TIA ... and Jellin .... That's what happens to your brain on strokes. Hah ha ha ha. 2Jokes in One!)
Is that like Janet "Shaky" Reno?
so 3.90% q2 gdp, and they can't get off the .25 basis fed funds rate...RRIIIGGHHTT
All I can say is WTF??
Markets go up for years on bad news is good news because no rate hike, and now they're going up because a rate hike is great news - WTF.
It's simple. Markets can only go up.
So, consumer spending is up and will continue to go up as inflation increases. Boy, whas it up in Weimar Germany, but they didn't brag about it.
This is what happens when you want something too badly:
http://darrinbell.com/wp-content/uploads/2015/04/db150423_CarlyFiorina.jpg
Absolute Bullshit!
" The brave Leprechaun mounted his Unicorn one Last time.He then reached into his pouch and pulled out a hand full of Skittles on a bed of Four Leaf Clovers and fed his steed. They both could feel it. This ones gonna be close. "
Since the FED knew this was coming, why didn't they raise the 25 bps?
And now we're supposed to believe that rates are going up before the end of the year? What will possibly happen, what new previously unscrutinized data point wil make this all possible?
How do you know they're lying? Their lips are moving.
great point
and let's not forget the stroke from Yellen yesterday
Awesome! Great eCONomic news! Does this mean we get our chocolate rations raised?
"Somebody go out and buy a pack of gum"
"I'm on it! I'll get the economy size and a bag of chips, to boot!"
"Don't forget to get the receipt dated to the last quarter. Show them your Fed badge if there are any problems."
To achieve globalization, growth has to be moved around the world so that each region can be successively enslaved to the monetary power.
Those in power will not tell you, but by necessity this means that things must be taken from one part of the world and given to another part of the world (as productive work has been taken from the US and given to Asia). In then end, we will all be enslaved equally.
It seems to have been determined that slavery with whips, swords and guns is temporary, but debt slavery has a much longer shelf-life. Once people have tasted what they believe is a better life and a means to achieve that life they will enslave themselves... especially the most fiat rich.
The con just continues to get bigger and bigger.
Core Personal Consumption Expenditures rose by 3.6%, far above the 3.1% in the prior revision and above the 3.2% expected. It contributed 2.42% of the final 3.91% GDP annualized number, up from 2.11% earlier."
Doubtful.
Lower gas prices may be a factor, but it damned sure isn't a result of new and better jobs, with rising middle class incomes. HP, Caterpillar, and others are showing us this almost weekly, as is the latest uptrend in UE jobless claims, which will likely rise (perhaps sharply) in the coming months.
That's the constant problem, and whacky Fed policy isn't turning THAT around.
It is THIS, I think, that is holding the Fed back. I've hammered the cause of our situation out many, many times, and the CB knows it's so. They can't fix it, and they know that too. GDP "growth" isn't organic; it's either manipulated into being, or it's the result of something else's loss.
Major and unmistakable declines in global demand for inputs are gradually being acknowledged, and that leads to deflation in some staples, like gasoline. But...THAT'S not growth.
That's a kind of eco-canabalism that WILL lead to serious declines in staple supply, and concomitant increases in price soon.
If one looks at the GDP chart above, the positive numbers in quarters past correlates with the chronic fear of rising mortgage rates--that haven't happened. If anything, they've declined somewhat further in the last several years, which is why refi's are still big, and HARP is constantly pushed on shack owners. There's a racket for that that makes dough on handling these, charging the loons in that racket a price to save interest costs on existing mortgages.
But that, too, ISN'T growth. It's racketeered manipulation, nothing more.
There are many more of these games being played. Subprime autos is another example, NOT a function of new prosperity, but rather, financially-engineered pathways to induce new debt not likely sustainable on paltry incomes and stagnant income growth.
We have been here before many times, and the result is not good, especially on prior debt loads.
Government and the Fed have hackneyed program after program to try to put a few more coins into spender's pockets, HOPING, to generate demand growth, but it still isn't happening in any sustained way, because it's not the result of real, organic growth.
THIS is why the Fed isn't raising rates.
There isn't any genuine, middle class growth to keep it going.
After 40+ years of mindless western corporate outsourcing of middle class jobs, how could there be?
On top of everything else, it STILL continues unabated...
...and we continue to put up with it (HP just last week, for example).
m
The problem they are increasingly having to deal with is accounting at the micro level doesnt correlate
As more and more companies report lower sales in both units and revenues - the pattern forms in countless array of products - which expose the macro manipulation for indexes in GDP / Inflation / Unemployment / Factory Utilization.... and the best one Confidence Indexes.
Trump and Sanders in many ways have the same message on the right and left - if it is so great - why the traction?
In other words... the FED wants the markets higher.. THey will make them higher. Do you miss the move? I have and will. I took my ball home along time ago. I ain't playing their games. Fuck em... and don't fight the FED is even more of a trading strategy then ever before. (Right behind HOPE)
Spike in May...
What amazes me, is for the last few years housing and HC have been the major items in PCE...this time housing went negative even though prices continued to rise...how does that work exactly?
Three years of corporate profit revisions in this report, dating back to first quarter of 2012. A lot of profits just disappeared. Just what do those disappeared profits do? Make the most recent quarters look a whole lot better.
Imagine that.
I keep a spreadsheet with quarterly profits before and after taxes as well as proprietor's incomes. This way I have a more complete picture of the business world's bottom line.
And, no, matter how you look at it, this economy lost its mojo the first quarter of 2013. And it has not rebounded.
It's all meaningless.
It's not representative of the real world that we plebs live in.
Sure, some plutocrat may jerk with a number here or there and the whole world will feel its affects.
But, really, does 3.9% growth mean a damn thing? Especially in the light of just how twisted and contorted that number is?
How about this instead: The vast majority of this nation doesn't have a week's worth of savings in the bank. Oh, and about a quarter of this nation is on food stamps. Hell, probably 2/3rds gets some sort of government assistance. Yeah, and we're also 200 trillion in debt to the Fed and China. Like that money is ever going to get paid back.
I tell ya, it's tough, going from the greatest nation ever to a third world fascist hell hole.
hey, what do you know. the market's up. yeah.
What an absolute fucking circus! Every mandate the Fed. set for itself has been met on paper, except for caugh caugh inflation.
Apparently none of the voting members consume anything but horse shit.
If consumer spending is so high then why are inventories still so high, and current PPI & CPI numbers coming in shitty? Why is China manufacturing numbers still deteriorating?
Rent hike, food hike, healtcare hike , asset hike,
the US consumer can't take no more hikes.
But I'm sure the banks will love it all the way!
"Core Personal Consumption Expenditures rose by 3.6%, far above the 3.1% in the prior revision and above the 3.2% expected. It contributed 2.42% of the final 3.91% GDP annualized number, up from 2.11% earlier."
Perhaps in a follow-up piece, Tyler's can flesh out the 'Core Personal Consumption Expenditures' - like, what kind of expenditures these are - from what sector/s. Automobiles...?
Third-quarter GDP tracking below 2%, complicating Fed decision
23 September 2015, by Jeffry Bartash (MarketWatch)
http://www.marketwatch.com/story/bumpy-us-economy-hits-more-turbulence-2015-09-23