Q4 GDP Misses Big As Exports Tumble: US Economy Grows A Paltry 1.6% In 2016

Tyler Durden's picture

It appears that Deutsche Bank's warning that the global economy is about to roll over was spot on, because moments ago the Bureau of Economic Analysis reported that GDP in Q4 rose only 1.9%, barely above the lowest forecast of 1.7%, and below both the consensus estimate of 2.2% and the whisper estimate of 2.5%-2.6%. The reason for the big miss, and nearly 50% drop from the 3.5% print in Q3: a collapse in contribution to GDP from trade (net exports and imports) which subtracted a whopping 1.7% from the headline number. So much for that bumper soybean bumper boost to the US economy. The silver lining: Business investment picked up to 0.67% of the final print, potentially a harbinger for faster capital spending in 2017.

Net exports subtracted 1.7% points from Q1 GDP, the most since the second quarter of 2010, as the trade deficit widened following a jump in soybean shipments that helped add to growth in the third quarter. The chart below shows just how big the trade slowdown was in the last quarter.

The adverse impact from trade is shown in the contribution chart below: the -1.7% reduction from the bottom-line annualized number was the largest since 2010.

Inventory expansion added 1 percentage point to GDP growth, as stockpiles were rebuilt at a $48.7 billion annualized pace following a $7.1 billion rate.

Personal Consumption Expenditures, while not distressing, slowed down again, and contributed just 1.7% of the final number, the lowest since Q1. In addition to household spending, the economy got help from business spending on equipment, which rose 3.1% for the first gain in five quarters. Inventory accumulation added the most to growth since early 2015, housing made the strongest contribution in a year and government spending picked up.

Nonresidential fixed investment increased at a 2.4% annualized pace, adding 0.3% point to growth, the most in five quarters. Investment in nonresidential structures, including office buildings and factories, fell at a 5 percent rate after a 12 percent jump.  Residential construction increased at a 10.2 percent annualized rate, adding 0.37 percentage point to growth. That followed a 4.1 percent decline in the previous three months.

Government spending grew at a 1.2 percent rate as state and local outlays picked up. Spending by federal agencies fell for the third time in a year, dropping at a 1.2 percent pace.

After-tax incomes adjusted for inflation climbed at a 1.5 percent annual rate, a three-year low. The saving rate decreased to 5.6 percent from 5.8 percent.

The big drop in Q4 GDP growth means that full year 2016 GDP stood at only 1.6%, the slowest print of the decade.

Some more details from the report:

The increase in real GDP in the fourth quarter reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, residential fixed investment, nonresidential fixed investment, and state and local government spending that were partly offset by negative contributions from exports and federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.

 

The deceleration in real GDP in the fourth quarter reflected a downturn in exports, an acceleration in imports, a deceleration in PCE, and a downturn in federal government spending that were partly offset by an upturn in residential fixed investment, an acceleration in private inventory investment, an upturn in state and local government spending, and an acceleration in nonresidential fixed investment.

 

Current-dollar GDP increased 4.0 percent, or $185.5 billion, in the fourth quarter to a level of $18,860.8 billion. In the third quarter, current dollar GDP increased 5.0 percent, or $225.2 billion

 

The price index for gross domestic purchases increased 2.0 percent in the fourth quarter, compared with an increase of 1.5 percent in the third quarter (table 4). The PCE price index increased 2.2 percent, compared with an increase of 1.5 percent. Excluding food and energy prices, the PCE price index increased 1.3 percent, compared with an increase of 1.7 percent (appendix table A).

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thesonandheir's picture

Just print moar soya beans what the fuck?

BaBaBouy's picture

Einstein Hellooo... Ultra HIGH USD ... This is result ~

gatorengineer's picture

But the people are happy because our flat screens, where we can watch the new 24hr Kardashian channel cost less.

philipat's picture

So after inflation, negative right?

Time to get the Fed's foot off the throat of Gold...

new game's picture

or is that "after" net imports? lol, fuel for the trump fire- me thinks...

Handful of Dust's picture

The real GDP has been negative for the past 8 years so why fuss?

sodbuster's picture

Why?? Cause from now on the data starts to get real. No more massaging the numbers to make Obozo look good.

PodissNM's picture

If the election of Trump means the the media will actually start telling the truth about how screwed up the economy really is then that alone justifies his presidency.

JRobby's picture

Exactamundo!

This is on Oblivio's watch (The Manchurian Kenyan)

MSM will blame Trump

Darktarra's picture

And yet the Dow is 20,000+ ... something isn't adding up at all! 

silverer's picture

It's only adding up into the pockets of the top 0.5%

gatorengineer's picture

Can you imagine what the non-quad seasonally adjusted numbers look like?

May start to get ugly if old Yeller sticks it up Trumpsters ass with another 0.25

silverer's picture

0.25 lol. It's a measure of how sick the US finances are for sure. Remember a couple of years back when the ruble took a big hit? Putin had installed some babe who really had a handle on it. She shoved rates up to 16%, and the ruble recovered like a rocket. Imagine what would happen in the US if you jumped interest rates to 16%! Heads would explode on Wall St.!

two hoots's picture

It was all good betore Trump took office. 

Grandad Grumps's picture

Growing at 1.6% would be great if is was not for debt enslavement and planned inflation.

new game's picture

100percent of 1.6 percent = gov.org spending growth, that is probably the accurate number. zero from zero, and zero is gone golfing, thank the spirits of populism...

Arnold's picture

Gotta keep an eyeball on him.

http://www.news-gazette.com/news/local/2017-01-27/obama-sought-speaker-u...

 

 

Only Comment

 

"Please no.

He doesn't really care about this state at all.   He obviously doesn't care about the issues in Chicago.   If he did, he would have done something to help his friend, Rahm Emanuel.  He could have, he didn't.  It was just not important enough to him."

King Tut's picture
King Tut (not verified) Arnold Jan 27, 2017 9:31 AM

Rahm could care less as well as long as his (((Gold Coast buddies))) are taken care of 

NugginFuts's picture

I'm not sure about you, but I plan on leveraging every last cent I own and every bit of credit I can get my hands on to buy the ATH!

Make America Gullible Again!

FreeShitter's picture

There's not a better time than now to go all the fuck in.....CTRL-P to the moon! lets make dow 30k this quarter.

Seasmoke's picture

This is End result of USD being way too strong. Everyone knows it. Trump better have that steel cage match with Mr. Yellen sooner rather than later.

King Tut's picture
King Tut (not verified) Seasmoke Jan 27, 2017 9:32 AM

Be careful what you wish for

BigFatUglyBubble's picture

Best way to get over a hangover?  Just get drunk again, works like a charm.  Then one day you shit your liver out.

1stepcloser's picture

Its Trump's Fault

-Obama

foodstampbarry's picture

Obozo left Trump with a shit economy, it will take 8 years to climb out of this mess

FreeShitter's picture

Its never coming out of ths designed mess.  fixed for you.

angry_dad's picture
angry_dad (not verified) foodstampbarry Jan 27, 2017 9:26 AM

Obama presided and engineered the greatest transfer of wealth in the history of the planet.

Thanks to worthless obama's incompetence, now the top 2% own 93% of the nation's wealth.

Who knows how long it will take to clean up this debacle.

King Tut's picture
King Tut (not verified) angry_dad Jan 27, 2017 9:33 AM

The wealth transfer to the 1% began in the 80s- it just reached critical mass under Obama 

silverer's picture

I always use 1983, because the charts start to take off right around then. Mission #1 for Trump must be to inform the people of what's been happening since then. Most don't have a clue.

FreeShitter's picture

Obama didnt do shit except suck off reggie and play 18...Greenspam, Bukkake, and old Yeller did it.

hotrod's picture

And we know for a fact that Half of that paltry growth was due to HEALTHCARE/ACA/OBAMACARE.  Then Inflation alone, if deflated out of GDP, would reduce the GDP into negative.

Housing and rents exploded in 2016, even a ticket to Disney became unaffordabe for many, check out the price of Cheese. Milk would be $7-$8 gallon if it was not subsidized to prevent rioting.  Go buy the PARTY bag of Nacho Cheese Doritos.  $5 and only enough for 1 person.

I am Jobe's picture

Disney, MLB, NFL , Cruises are the result of dumb parents and then the kids having kids further dilution and the cycle continues. 

hotrod's picture

Falcons game for mid level seats, parking and maybe a hot dog OVER $500 FOR A FAMILY OF 4.

Arnold's picture

Much like the Bengals,

when they pay you that much to attend a game,

there's some real money involved.

 

Reds Joke:

When the Cincinnati cops issue a ticket, it is to a Reds game.

King Tut's picture
King Tut (not verified) hotrod Jan 27, 2017 9:35 AM

Bears game that would be closer to $1K

Bill of Rights's picture

Liberal dopes over at Forexlive are blaming Trump for this, you know that WHOLE five days he has worked lol....take a click over and tell them how you feel.

angry_dad's picture
angry_dad (not verified) Jan 27, 2017 9:24 AM

You are looking at Obama's last downward revision.

Now TRUMP has to fix this mess previously papered over by obama's whoppers.

orangegeek's picture

It's worse than this - barry's gone for good - time to clean this trail of marxist shit up.

 

#drain-the-swamp

GoingBig's picture

You think exports are bad now, just wait 2 years for the isolationist policies to take effect. Que Great Depression 2 in 2

adr's picture

We've been in Great Depression II since 2000. We took another leg down in 2008. The only positive thing has been the massive appreciation in the stock market and home prices thanks to the Fed, neither of which are a positive for the real economy.

Since 2008 18 companies I worked with over the years have folded. Doesn't seem possible during the greatest bull run of all time, unless the greatest bull run was nothing but bullshit.

Bam_Man's picture

And I'm sure that higher interest rates will definitely help.

ROFLMAO.

St. Alphonzo's picture

Obutthead accomplished exactly what he wanted...bring the US to its knees and cause civil unrest...nice job asshole

Dark Daze's picture
Dark Daze (not verified) Jan 27, 2017 10:31 AM

Well, what did you expect? Other countries are willing to sell to you but with a currency that increased by 35% in the last year, and the uncertainty surrounding trumps admin, i suspect buyers are going elsewhere. It isnt as if what you produce can't be found in other places.

You should take a look at what's happened to your wheat exports, for example. Down 50% since 2014/15. Nobody wants shit laced with glyphosates. It isnt even fit for animal food and now you have a second crop on top of the last one.

I suppose now big agra will demand a tax on wheat imports so they can be sure they can poison as many of you as possible.

Im so happy that you americans are soooooooo exceptional.