"Peddling Fiction" - US Economy Grew A Paltry 0.69% In The Fourth Quarter, Missing Expectations

Tyler Durden's picture

And so the final quarter of 2015 is in the history books and we can officially accuse the US Bureau of Economic Analysis of "peddling fiction" about the US recovery, because at a growth rate of 0.69%, the annualized rate of economic growth was the lowest since the first quarter of 2015 when it grew an almost identical 0.64% which was blamed on the harsh weather. This time however, there is no easy scapegoat.

The breakdown was as follows:

  • Fixed Investments, that residual from the oil collapse, tumbled although at 0.03% annualized it was still a contributor to growth. Expect this to change
  • Inventories, as expected, subtracted -0.45% from GDP. This was less than many had expected suggesting there will be more inventory liquidation in Q1
  • The government contributed 0.12% to Q4 GDP
  • Net Trade, as was to be expected in a world in which global trade is slowing drastically, subtracted another 0.47% from the annualized report
  • The only silver lining was Personal Consumption, which rose 2.20%, above the 1.8% expected, and contribted 1.46% to the bottom line. However, as we will show in a subsequent post, the bulk of this "growth" came from just one line item again: healthcare.

In other news, core PCE rose 1.2% in 4Q after rising 1.4% prior quarter, while the clearest confirmation of the rapidly slowing US economy was final sales to private domestic purchasers which rose just 1.8% in 4Q after rising 3.2% the prior quarter.

But what some may be most interested by is that the Q3 implicit price deflator was +0.8%, begging the question: just what would the real GDP print be if it wasn't propped up by CPI gimmicks.

Here is a chart of US GDP by quarter:

And a full breakdown:

 

The punchline: annual GDP growth has just dropped to 2.9%, below the 3.1% in Q3, and the lowest in three years, since the 2.5% recorded in Q2 2013.

Most importantly, the inventory hangover remains strong as ever, because if anyone can spot the "inventory liquidation" in Q4, they win a Zero Hedge hat.

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Looney's picture

Let’s throw in 3 or 4 seasonal adjustments, 2 deep-snow adjustments, and hire the Chinese dude responsible for cooking China’s GDP numbers and then… our GDP will turn into the humming 11%!

USA! USA! USA!

Candyman! Candyman! Candyman!

Beetlejuice! Beetlejuice! Beetlejuice!

Looney  ;-)

Haus-Targaryen's picture

What are the odds he blames Bush & Sanders blames capitalism when this shit goes upside down. 

remain calm's picture

Who the fuck believes their numbers? They are a bunch of lying pieces of shits, we know the media will not even question their numbers.

new game's picture

cut gov.org in half and -6 percent!

and that would just be the waste, ha...

CPL's picture

Sad thing is they stopped adjusting for real inflation when they all decided the removal of mark to mark accounting wasn't in their best interests in 2009.  The real number is probably closer to -4.0%  to -7.0% they are bleeding out all over the place in the meanwhile.

new game's picture

really -10 percent plus, as gov.org is part financed, so net, net, net, we are in a fucking financed recession at best. fuck=en hope and change, green shoots and if you have it,we are coming to get it one way or another...

SDShack's picture

Recovery Summer 7.0... or is it 8.0? I've lost count.

drendebe10's picture

Whaaaaat???  The illegal Indonesian kenyan alien muslim fudgepacker tell the steeple a lie??? No way. 

lunaticfringe's picture

Let's force Americans to buy cars, tvs, and shit- pass a law like Obamacare- and watch GDP go Supernova. Woohoo!!

Baa baa's picture

Right! Pay a stiff penalty to the gov for no participation. It has worked so well up to this point.

yogibear's picture

More and much larger Fed QE4. 

The Davos people were crying for more CB welfare.

kotfare17's picture

I repeated it more than 300 times here on this blog since 2013 when I was commenting under ekm and ekm1 names, that world trade and economy will decline then collapse, due to 0% rates and QE.

 

Here's next:

If Fed doesn't raise rates to 4% rapidly, output will collapse, not just decline.

Only aggressive rate hikes can now save the economy

Haus-Targaryen's picture

Can you imagine the fallout from a 100 bps increase? 

The Fed has a choice:

1) Throw equities, bonds, and the solvency of the US government under the bus to save the dollar.  We will suffer a USSR style collapse, but the USD survives.  

2) Juice the system again with moar cheap money and lots of debt, QE4 & NIRP, and buy another 3-4 years before the velocity of money picks up, we get a good dose of inflation and then suffer a USSR style collapse? 

_ConanTheLibertarian_'s picture

In the end, any choice will crash the system.

new game's picture

and that my friend, is why politics it what it is. a tough choice puts the econ in sevre depression. and that is why any candidate will fail. JUST CAN'T DO IT! call it no choice, eat your fyucking peas bitchez!

_ConanTheLibertarian_'s picture

+1

So what did you do to get banned twice?

Dr. Engali's picture

He didn't get banned, he got laughed off the site. He'll get laughed off again. 

WillyGroper's picture

@Dr.E,

why would he self identify if he was laughed off?

given he's lived thru the collapse of the eastern bloc, i wouldn't discount everything he says...that is unless you too have had the experience.

gatorengineer's picture

Out of curiosity, what are we outputting?  Rate raises will strengthen the dollar and crush commodity prices (in dollars).

Cutting rates will stave off the collapse a couple of years.

 

The only idea that might have a shot is a slashing of the corproate tax rate (get the corporate centers back), Immigration elimination (H1B elimination to help the middle class by driving up salaries, Illegal immigration reform to increase low end salaries, Tarrifs on dumped goods (yes protectionism), a gutting of strangling government regulation.  I have a much better shot of winning powerball three times i a row than any of that happening.

tarsubil's picture

Are you fucking high? 4% rates? The central beast, the Federal Government, would blow up if rates went to 4%. There is no fix. Might as well climb out on the wing of a dive bombing 747 to fix the engine.

Lady Jessica's picture

Antal Fekete espouses a similar idea to ekm1.

An upward sloping rates trajectory leads to capital formation.

A downwards sloping rate trajectory does the opposite.

It's an awesome worm hole to go down.

Deflation was intentionally inflicted on Japan and then all the economies of the West.  Why?  Remember Blankfein "Doing God's work"?

Dr. Engali's picture

Pay no attention. EKM has been one of the most inaccurate posters I've ever witnessed on this site. The fact that he is getting upvotes just goes to show the level of stupidity that has signed on this site since he last left.

new game's picture

you are a bond guy, what is your thought?

tapering growth as lower rates will spur something?

Baa baa's picture

And of course your credibility and accuracy are above question... self-absorbed, elitist, Shithead!

Dr. Engali's picture

Ahhh, was somebody's butt hurt? I don't go boasting and making claims that I called something that was a) either painfully obvious or B) called after the fact. Maybe you will remember all of his claims about a collapse being imminent under hie previous pseudonyms. 

CPL's picture

They should have never moved it under 11% to begin with, they've created their own issue now that will mathematically never be corrected.  Only two options exists at the moment.

1)  Run away hyper inflation where it turns a trillionaire into a Zimbabwe trillionaire in a matter of months.

2)  Financial collapse where faith in fiat renders all paper assets to 0.

Either way the dumb fuckers should have never played on faith in a business gallery.  Doing business that way, always lose overlooking the primary fact to make business, you actually have to HAVE business.  To do that, need an offer on the table that's worth something.  So far nothing of value seen, offered or delivered in a limited time frame.  Other's are waiting.

Dr. Engali's picture

That's the dumbest fucking thing I've read. First of all there is no saving the eCONomy barring some giant new technological advance. Secondly the federal government can not afford 4% rate, and third 4% rates on the front end would invert the curve and wipe out the derivatives market. The only thing that will "save the eCONomy"is a complete systematic reset so that debt is wiped out. Unfortunately that will bring about chaos and war, but we are headed there anyway.

new game's picture

RATES-MUST-GO-LOWER, plain and simple (math)!!!

buzzsaw99's picture

credible , like kuroda.

Bangin7GramRocks's picture

.69! I guess we shouldn't just bury our heads in the bush. Uh Oh Fellacio!

Mick Shrimpton's picture

Quit looking at the glass as nine tenths empty!

Eyeroller's picture

Cause if you do that it's rayciss..

ayufan's picture

naw.. just revise the decimal point towards the right... 3rd "seasonal adjustment" to 6.9%.

 

Everything is perfect!

ayufan's picture

naw.. just revise the decimal point towards the right... 3rd "seasonal adjustment" to 6.9%.

 

Everything is perfect!

KansasCrude's picture

No effing way the eCONomy even smelled positive growth in Q4.  The lies get bigger and more frequent off with their heads.    Minus 2-4% at the least.  All of the retailors would not be showing terrible comps if we were growing.   Must be some massive adjustment going on with the massively inflating health care costs to be able to manufacture the illusion of  growth.  Thats not growth its INFLATION.

new game's picture

people need to fuck moar, organic growth with a 9 month lag...

Baa baa's picture

Don't you get it? Our children want us dead. No love, only money...

Ouagadoudou's picture

Bad news is good news ? We'll see todat

Kina's picture

The bottom of the economy is a long long long way away.

JoeTurner's picture

Bullish for FANGs....

Dr. Engali's picture

Clearly the problem is we aren't printing enough. I don't know why policy makers won't listen to Nobel peace prize winning Paul Krugman Clearly the man is right. We need to print moar. Notice I don't say how much moar, but just moar....

1975_gold's picture

Speaking of peddling fiction about the economy in 2016, check out "The Slave Formerly Known as Jane Foreman" -- a dystopian fictin based on the economy collapsing in 2016.

vegas's picture

It's the "new norm" "Hope & Change" bullshit Libtards everywhere repeat to themselves to remain delusional. And the really good news? All you have to do to get more of this is hold your nose and vote for either Cankles or the Communist. "Vote for me, I'll be Obama's third term and finish the job of killing every last fucking job in this country!"

 

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