Q2 GDP Revised Lower To 1.1%, As Expected, Even As Personal Consumption Rises

Tyler Durden's picture

In what has been called the economic equivalent of hitting 00 on roulette, moments ago the BEA announced that Q2 GDP eased off from the original estimate of 1.2%, declining fractionally to 1.09%, and right on top of consensus estimates, which also expected a 1.1% print in the second quarter. This means that following the disappointing Q1 print of 0.83%, the first half economic growth is now officially just below 1%, or 0.096% to be precise.

There was little change in the constituents, with Personal Consumption revised modestly higher from an already questionable 2.83% to 2.94%, translating into 4.4% sequential increase in personal consumption, above the 4.2% expected, and higher than the pre-revised 4.2%. Also improving was fixed investment which is said to have dipped by "only" -0.42%, modestly better than the -0.52% reported a month ago. However, this was offset by a downward revision to private inventories which subtracted -1.26% from Q2 GDP, worse than the -1.16% reported previously, while trade now contibuted only 0.1%, down from 0.22% last quarter. Finally, government was also revised lower from -0.16% to -0.27%.

 

While there were no major surprises in the report, we urge readers to keep an eye on consumption, which as we showed one month ago, inexplicably soared in the first quarter. In fact, as shown below, after today's revision it is just shy of the highest print reported over the past five years.

Considering recent commentary from dollar stores which plunged most on record yesterday on the back of a collapse in low-income spending, we doubt that this seasonally adjusted and goalseeked number is even remotely close to reality.

Finally, with real GDP now rising at just 1.2% Y/Y, entirely propped up by the consumer, any incremental weakness to US spending in the current quarter would push the US into a technical contraction.

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VinceFostersGhost's picture

 

 

Q2 GDP Revised Lower To 1.1%

 

The future's so bright.....I gotta wear shades....

E.F. Mutton's picture

To be "Double Secret Revised" downward late on a Friday around Labor Day weekend.

LowerSlowerDelaware_LSD's picture

Personal consumption (AKA the nightmare known as Obamacare) **forced** spending rises.

Winston Churchill's picture

Might help with the nuke flashes.Lead glass sunglasses.

Paul Kersey's picture

Higher personal consumption = more money spent on higher health care costs.

mayhem_korner's picture

Or more money borrowed for cahs in Bawstin.

gatorengineer's picture

Very bullish print factor 10 Mr yellen

mayhem_korner's picture

Show me GDP against credit expansion for the same period and then let's talk about "growth." 

Fisherman Blue's picture

 

>>>> They will be able to float this until they elect the criminal bitch

>>>> Yellen and Hillary will both shit thier depends when it blows up in October

BeerMe's picture

That may be the better result of the election.  Have the shitshow blow up for those that created it.

Rainman's picture

Skyrocketing healthcare spending ... i.e., ObamaScare premiums ... is fueling the personal consumption rise.

https://fred.stlouisfed.org/series/DHLCRC1Q027SBEA

onewayticket2's picture

they're rolling growth into 3Q for a blockbuster result....pre election

Winston Churchill's picture

What growth ?

The figure they can't manipulate, like container,road traffic and rail traffic have all rolled over

into large negatives yoy.

We are already in a new recession within the greater depression.

jamesmmu's picture

Consumer spending up 4.4%, WTF??????!!!!!

Infield_Fly's picture

Adjusted/Revised/non-GAAP consumer spending. 

847328_3527's picture

Uber reportedly lost $1.2 billion in first half of 2016

http://www.chron.com/business/article/Uber-reportedly-lost-1-2-billion-i...

Uber-awesome!

idontcare's picture

.... and the market is opening 50+ up...

CJgipper's picture

I can hear the printing presses warming up from where I am.

BeerMe's picture

It was the worst of times.  It was the best of times.

ajkreider's picture

So lower inventories (good news), lower government spending (good news), higher investment (good news) and higher consumption (good news).

 

I'll take it.