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Final Q3 GDP Misses As Personal Consumption Drops Big
And so the year ends not with a bang but with an economic whimper, as the final Q3 GDP is revised lower from 2.0% to 1.8% on expectations of an unchanged print. The reason: Personal Consumption contributed only 1.24% instead of the 1.63% in the second revision and 1.72% in the advance forecast. No bias there at all. But sure enough, here comes the inventory kicker, which subtracted just 1.35% instead of the 1.55% seen previously. What this means is that the inventory kick which was expected to come in Q4 2011 was pushed forward to prevent a 20% collapse in GDP today as keeping inventory change fixed would have resulted in a 1.6% Q3 final GDP. Net net - very weak report and one which portends weakness from Q3 is spilling over in Q4, where in addition to everything we will soon see the NAR existing home sale adjustment hit the economy with a double whammy of historical adjustments.
In other news, the BLS reports that US businesses have increasingly less temporary workers left to fire, as Initial Claims came at another 3 year low of 364K down from an upward revised 368K, and well "better" than expectations of 380K, which only means that employers are only borrowing termination time from the future as the economy is finally starting to decouple with reality. Just as amusing, the BLS has completed 2011 with a perfect track record of prior upward revisions in continuing claims, this time the previous number being raised from 3,603M to 3,625M with the current one largely irrelevant. Finally, the 99-week cliff once again creeps up as 136K people drop off extended claims and EUC benefits. Merry Christmas - the economy is improving and what not.
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The resumption of consumption was an assumption...
Bernanke's got the fix in 15 minutes...after he tells people to spend more and tries to drive them from savings...which will take longer...but no more than 15 minutes after that.
The “growth” in the USA last quarter can be summed up as follows. The GDP “increased” 2.0% and the Gross Domestic Income, what we are actually earning, grew at a 0.3% pace. You do the math.
I get so fucking tired of having to dig through the Ministry of Truth's numbers and find what is real these days. Fucking bull shit.
If anyone is interested here is a study of how government growth retards real economic growth (the part of the economy where people produce real things) 0.5% to 1% per 10% of government growth.
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1734206&download=yes
The printing has all been our parasite politicians wanting a free ride. We are approaching our King Louis XVI period in our history.
With numbers that fake our consumption
So that liars can claim growth resumption
When truth finally hits
And makes cognitive fits
Enslavment's the only assumption
As we all know, GDP is not a good measure. Here are some of the problems with GDP.
The Problem with GDP
- but, but, but Bloomberg says there were 4,000 less initial jobless claims and that the slow down in firings will form the base for increased consumption, which drives the US economy....
Bloomberg is soooo educational and poooositive.... - and surely this good news and positive attotude will drive stocks up today...
Hopium and lies for dummies - stuff of Empire, Bitchez!
No shit. Y= C+I-G+NX is what it should be.
http://usa-wethepeople.com/2011/02/y-c-i-g-nx-and-the-gdp-bull-crap-numbers/
Why can't the algos figure out that this is bullish? Time to buy more CMG!
Fuck CMG, its all about LULU
Leading some to a resumption of stock dumption
If one should put a negative (-) sign in front of those numbers...
it's bullish, right?
Y = C+I-G+NX. Correct.
and that's what 5 trillion more in debt gets these days?
Next time will be better
It wasn't enough. Just ask Paul "I Wish I Were In A Twilight Zone Episode" Krugman.
Imagine where GDP would be if a balanced budget had been required during the last 5 years.
A smoking hole in the ground?
A black whole... which is where the 99ers reside after their unemployment benefits expire.
Corporate EPS growth is under strain in many sectors. It is not believable that companies are about to begin a massive hiring spree.
A balanced budget accomplishes nothing. Federal spending has to be restricted to no more than 18% of the GDP, preferably 11%, killing the social programs completely.
Clinton 18.2%, Bush II 20.7%, Obama 25.3%.
Interesting.
My point was that GDP would have been substantially lower without the trillions in deficit spending over the past 5 years.
Non-existent since social programs would be cut to the bone and nobody would have any money to spend on anything. Moreover, if we had to live by a balanced budget for 5 years, we would've had a deflationary economic collapse by now.
No no no, can't u see, it's all good. Actually, to quote, it's "great news for the eCONomy".
Dec. 22 (Bloomberg) -- Drop to 364k last week (est 380k)
“is great news” for the economy, could point to big payroll
gains, writes Ian Shepherdson, economist at High Frequency
Economics, in note.
• "Robust sales growth’’ is bolstering business confidence, limiting job cuts: Shepherdson
• If sustained, data point to private payroll gains of about 200k; could be as much as 250k if growth picks up and job cuts slow by end of 1Q: Shepherdson
And there u have it. It doesn't matter what the fudged numbers are, it's always "great news" and very bullish.
I'll see your "great news", and raise a "surprisingly healthier" ...
according to AP:
“The job market is healthier. Americans are spending lustily on holiday gifts. A long-awaited turnaround for the depressed housing industry may be under way. Gas is cheaper. Factories are busier. Stocks are higher.
… the economy has grown faster each quarter this year [my italics], and the last three months should be the best.
Most analysts now rule out another recession. They think the economy will grow at an annual rate of more than 3 percent from October through December.”
http://finance.yahoo.com/news/economy-ends-tough-2011-surprising-192611459.html
Crappin' out, bitchez!
People are returning their black friday purchases due to no money..can't wait for those numbers
Yep, have a friend who manages a Target in Dayton, Ohio... said the returns on bigger ticket items from Black Friday are outpacing their worst expectations. A bud of mine bought a 50" plasma from HH Gregg, took it back a week later - feeling guilty about spending when he should be saving.
Yep, numbers were on Bloomberg.com few days ago, I think this year's returns were estimated to be 21% higher or something (2011 vs. 2010)
I heard $7 Bil. so far a week or so ago.
So for the year GDP has run at 1.1%. I don't think anyone predicted that last year. Right at the tipping point and really Q1 and Q2 should be lower. Will they ever change that? Doubt it. Pathetic.
Anyhow, how can anyone say the US economy is being resilient with these kind of numbers? Ain't much better than all of Euroland.
The GDP is propaganda. The only "growth" is borrowing and spending by the feds.
ok already. we told you we were sorry about double counting some of those house sales..........
here comes the inventory kicker, which subtracted just 1.35% instead of the 1.55% seen previously
Reverse channel stuffing.
Bullshi... I mean bullish - nearly messed up there!
I. for one, am pleased that it was a positive number. The last thing our country needs is a recession/depression.
sarc/
The sad part is that they take that as an invitation for QE3. The idiots do not understand that when QE ends so does consumption.
[integral]QE dx
and oh before i forget.............happy chanukah to everyone.........
http://www.washingtonpost.com/local/the-lighting-of-the-national-menorah/2011/12/20/gIQA5lZa7O_gallery.html#photo=1
who loves you baby?
Biflation: GDP grinds a little lower yet (1.8 from 2.0) , while final GDP price index grinds a little higher (2.6 from 2.5). Perfect. Happy Holidays
Lookit claims are down this thing ready to ROCK!!!! JOe Kernan said so...
Every year same BS: they defer the counting to January.
This has got to be, in the wake of $2 trillion bernanke bucks, a sign that fed printing will not lead the personal consumption index higher (nor house prices) but merely shift power to inflation hedged oil producing countries, no?
only in an affirmative action obama economy can talking heads spew the spin that these numbers are wonderful. according to their logic if GDP trends down to 1.5 things will really be looking up. cramer and friends continuing to tout the "improving" economy
As usual.....
Gold and silver are the first items dumped over the side when a horrific GDP number is released.
Solution?
Buy:
- U.S. Dollars
- U.S. Treasuries
- Shopping Mall REITs
- Specialty retailers like CMG
Did I miss anything?
Might as well call General Jim to see if he will hold my hand.
LOL.......
nudnick?
RobotTrader, the Barclays of Zero Hedge.
hows that "consumer stronger than ever" thing working out for you robo?
Deflationary pressures in a recession, that's defensible. But loading up on Shopping Mall REITs? And Chipolte, the absurdly overvalued (52 P/E) vendor of overpriced tacos????? You are able to make two contradictory arguments in a single post, and you ain't no genius, son. Quit dosing on the California medicine, move to Stockton, and start encountering Real Life.
OT: Matt Taibbi blog article - Obama and Geithner: Government, Enron-Style
Matt nails both their sorry asses for covering up the massive fraud...
This is exactly what Obama and Geithner are doing now. By continually lying about the extent of the country’s corruption problems, they’re adding fraud to fraud and raising such a great bonfire of lies that they probably won’t ever be able to fix the underlying mess.
Read more:
http://www.rollingstone.com/politics/blogs/taibblog/obama-and-geithner-g...
Imagine a world with no "growth". A world where we are not dependant on growth to keep increased debt (money creation) going and sustainable. What if we had sound money? and corporations and individuals either succeed or failed in growing their "earnings" based solely on merit (improved performance) and not on levered individuals and institutions artificially increasing every metric that our scorecards are now based on? The higher "scores" have nothing to do with realilty. All this supposed wealth and progress is a total fiction and without meaning. The game is rigged at every level. We (and government)have cheated continuously and lied to ouselves for decades. Living standards improve only to the extent that productivity increases and NOTHING ELSE.
Then it would be impossible to wage unlimited war and provide unlimited social welfare benefits.
This is one temporary worker who will be added to the weekly claims report for week-ending January 7, 2012. I'm going to ring in the New Year by filling out a New Application for UC benefits.
GDP=Gross Debt Product
As for consumption...
Definition of CONSUMPTION (from meriam-webster) 1a : a progressive wasting away of the body especially from pulmonary tuberculosis I'd say consumption is doing just fine in Amerikkka.I may be joining you there Tsar. Things have really slowed down at my job in the last month. I program slot machines for a major gaming company and I have been sitting on my butt for the last month without a game to work on. I talked to my friend who manages the graphics dept(that is where the games start out) and they have nothing on the schedule for my group through next month. Funny thing is we had a dog and pony show last month put on by one of the big cheeses and he said he was going to be approving a bunch of recs for new hires. I'm off next week for vacation but I'm not sure I will have a job when I get back.
new footnote to the security bill giving Obuma the right to kill you w/o trial..any American citizen not willing to increase buying by 10% y/y is a terrorist and may be jailed w/o trial.
be patriotic buy buy buy..or jail
Now do you expect infinite printing and gold to the moon?
OK, but does this include the revision of GDP downwards because of the NAR bullshit?? Remember they said since 2007 they averaged a 14% overcount of home sales. A little research shows this:
http://www.nahb.org/generic.aspx?genericContentID=66226
So that is a pretty big "whoops"! My guess is this "miss" also does not include a further 20% reduction, not only because of houses but because of "refridgerators, we gotta move these color TVs", (Dire Straights), for 5 years! And more:
http://www.michaelcarliner.com/HE0110-Hous-GDP.pdf
Double whammy, it is also figured into the GDP because it in in RFI as well. I just wonder about all the other lies in GDP that are not real either like the "Car sales" where these idiots count the number of cares on the car lot as "sold", instead of counting the ones actually "sold"?
Hmm bearish GDP vs bullish Claims and bullish outlook for Q4.
Wonder which one wins. You could argue GDP is backwards looking and claims are forward looking, or you could argue claims are seasonally adjusted out the wazoo.
I REALLY hope that Gallop report is right on jobs being massively inflated and set to drop off a cliff as the season adjustments flip. Otherwise Im too short for this shit.
I don't know why the doom and gloom among you all. Everything is BEAUTIFUL baby!
http://finance.yahoo.com/news/economy-ends-tough-2011-surprising-192611459.html
I mean - this truly is journalism at its very finest......
is there anything lower than yahoo
Wow, lots of Hopium being spread around Yehoo!
That picture of that poor sap was perfect. She will be pushing that shopping cart around in about a year, but instead of gifts, it will be what she has left.
I wonder if they get paid by the piece or for each individual positive adjective.
Might be a good gig?
"Things are looking up." Exactly what the guys on that boat in A Perfect Storm said too.
pods
Merry Christmas - the economy is improving and what not.
Basically sentiments from my CEO at our XMas party: "The economy is getting better, but you guys aren't getting a XMas bonus or a raise next year. Happy Holidays!".
Wonder if the MSM is going to report this revision on GDP (that are becoming more frequent than sports figures in the news being involved in child molestation) with as much vigor when they "cheered" the slight uptick that was reported when the first Q3 GDP numbers came out a month or so ago.
GDP don't mean shit, as shown in this interview by Dylan Ratigan and Umair Haque of the Havas Media Lab:
http://t.co/i3WsBAwx
why go to all this analysis....it will be a 1%+ green day....just watch euroland <sarc>
all that money printing got them nothing
Fitch putting the US on a downgrade warning again? Saw it on Ampex newsletter.
DON'T FORGET, KIDS: All of congress' bogus budget fixes were based +4% GDP over the next 10 years.
Ben prints 10% more cash, and consumer spending "increases" by 1,2%. I wonder what this could mean.
Now you can understand Bernanke's whining about consumers.
Bernanke’s Plea to Consume (Not Save) and the Conflicting Economic News: The Good, The Not-So-Good and The Expected (Housing)http://confoundedinterest.wordpress.com/2011/12/22/bernankes-plea-to-con...
BLS - perfect record of upward revisions! 51-0 with only one week left in the season. Packers can't claim that.
When you're good, you're good!