It is somewhat ironic that even as reporters posing as economists, reporters posting as reporters, and even the US department of truth and failed weathermen posing as the Bureau of Economic Analysis decided to blame the "harsh winter" for the collapse in GDP, according to the BEA's own GDP report, real Q1 GDP which printed at -0.2% actually benefited from the cold weather as a result of Utilities adding 0.59% to the bottom line GDP in the quarter.
But wait, because if it wasn't for that now traditional "contributor" to the US economy, the mandatory tax better known as Obamacare, and which was the primary contributor to the 0.62% in healthcare contribution to GDP, Q1 GDP would have tumbled by a consolidated -1.4%.
Finally, if one also excludes the 0.45% contribution from the now ridiculous addition in inventories which even Joe Lavorgna has noticed and is warning will result in weaker growth in the future...
The near $100 billion increase in Q1 inventories means we could see a substantial slowing in the current quarter.
— Joseph A. LaVorgna (@Lavorgnanomics) June 24, 2015 [4]
... Q1 GDP would have been -1.9%.
So if one excludes just three items: Obamacare, the "harsh winter", and near record inventory re-stocking in anticipation of a spending deluge that never comes, Q1 GDP would have tumbled nearly 2.0%.
[5]
And this is why a recession-level inventory liquidation is imminent, one that could on its own push the US into recession:
[6]
So, bring on the rate hikes?
