The Ivy League Wall Street captured economists predicted a 3.2% GDP for the 1st quarter. The reported number was 2.5%. This number is utter bullshit and will be dramatically cut two years from now when they actually have the real numbers. The government makes this shit up on the fly. The confidence level of the numbers they report is about 10%. One look at the report and you know it’s bullshit:
Consumer expenditures still account for 71% of GDP. According to the government drones at the BEA, consumer spending surged by 3.2% in the 1st quarter to the highest level in over two years. How fucking gullible do they think we are? The payroll tax increase and surging gasoline prices syphoned money out of the pockets of every working middle class person in America. The Savings Rate is near all-time lows. Retailers and restaurants across the land reported horrific sales and earnings for their most recent quarters. Revolving consumer credit has been declining, meaning Americans are spending less on their credit cards.
So you have people with less disposable income and consumer companies reporting flat or negative sales, but the government drones report consumers had a surge in spending. Luckily, not one MSM journalist or cackling CNBC bimbo has an ounce of critical thinking skills. No one will question the government data that can’t possibly be accurate based on what is happening in the real world.
When this number is adjusted to a negative number in two years on a Friday night after the close, no one will notice or mention it.
You’ll be happy to know the drones say we only have 1.2% inflation. Carry on.
Overhyped Q1 GDP Grows By Only 2.5%, Biggest Miss To Expectations Since September 2011
Submitted by Tyler Durden on 04/26/2013 08:45 -0400
Less than an hour ago we speculated that “it wouldn’t be surprising for GDP to come substantially weaker than expected, only to be revised higher (or lower) subsequently.” Sure enough, we have gotten at least the first part right for now, with the advance Q1 GDP number printing a very disappointing 2.5%, on expectations of a 3.0% increase, up from 0.4% in Q4, and the biggest miss since Q3 2011. The reason for the big miss: Inventory and Fixed Investment came well below expectations, comprising 1.03% (of which autos represented 0.24%) and 0.53% of the 2.5% annualized increase GDP. Kiss the great CapEx investment story goodbye.
The only silver lining in today’s otherwise very weak report: Personal Consumption Expenditures, which were a sizable 3.2% versus the 2.8% expected, and amounted to 2.24% or virtually all of the net Q1 GDP growth. So far so good .The bad news, however, is that this number will not sustain into Q2 and look for expenditures to plunge in the coming quarter. Finally, let’s not forget that it rained like 5 days in March, so there’s that. And of course, very soon, all GDP will be revised to add intangibles, so in retrospect Q1 GDP will likely have grown by a Ministry of Truth blush-inducing 10% or so.
And for those confused why the spending spree led “recovery” won’t last, the answer is simple: the US consumer is out of money, as can be seen by this savings (or lack thereof) rate chart.