It must have been the cold weather. Maybe those millions of newly employed workers are so busy at work, they don’t have time to spend all that money they are making. The 4th quarter GDP was solely boosted by Obamacare spending and higher utility spending. The 1st Quarter is now at NEGATIVE 0.7%, to be revised lower in the future when no one is paying attention. The Fed’s own model shows 2nd quarter GDP near 0%. Anyone with two brain cells, can see that 99% of the people in this country are experiencing a recession. The expansion is only occurring on Wall Street and K Street. That’s the way they like it and that’s the way it will be reported on CNBC and the rest of the dying legacy media mouthpiece networks. So it goes.
“Welcome To The Contraction”: Q1 GDP Drops By 0.7%, Corporate Profits Crash
Submitted by Tyler Durden on 05/29/2015 08:47 -0400
And you thought the preliminary 0.2% Q1 GDP print from last month was bad. Moments ago, just as we warned, the BEA released its latest, first, revision of Q1 GDP (pre second-seasonal adjustments of course), and we just got confirmation that for the third time in the past four years, the US economy suffered a quarterly contraction, with the Q1 GDP revised drastically from a 0.2% growth to a drop of -0.7%: the worst print since snow struck, so very unexpectedly, last winter.
Incidentally, there has not been a US “expansion” with three negative quarters in it in the past 60 years.
Worse, the breakdown shows that far from being a non-core slowdown, consumption rose just 1.8%, below the 2.0% expected, and contributed just 1.23% of the bottom line GDP number. This was the worst Personal Spending contribution since Q1 of last year, when revised GDP dropped by -2.11%.
What is disturbing is that as noted before, inventories contributed the biggest component of Q1 GDP growth, adding $95 billion in real terms to Growth. Without that contribution, GDP would have been worse than -3%!
And worst of all, was the plunge in corporate profits. According to the report: