Catastrophic Q1 2014 GDP report at 0.1% makes 21 quarterly reports under Obama averaging just 1.76% each

The latest GDP report is here.

The decline in GDP in Q1 to 0.1% annualized was from 2.6% annualized in Q4 2013, a whopping 96% free fall. In other words, the economy did a panic stop, slamming on the brakes and hitting the wall.

Blaming it on the winter, for those of us who've seen more than fifty of them north of the Mason-Dixon Line, is laughable beyond belief. We don't hibernate like bears up here. We get up early and blow the snow off the 200 feet of driveway and get on with our day.

Here's the truth: Quarter on quarter durable goods consumption crashed over 70%, nondurable over 95%. Real nonresidential fixed investment was a catastrophe, the spread plummeting 136%. Residential investment added a decline of 5.7% to the previous quarter's decline of 7.9%. Exports went deep sea diving, the spread down 180% quarter on quarter, and the spread for imports was down even more, 193%. A slight uptick in government spending kept GDP barely positive.  

Five years of GDP reports under Obama have averaged just 1.24% per year, so the sixth year is off to a terrible start at 0.1%.

Eight years of GDP reports under Bush averaged 2.13% per year, pretty lame all by itself but 1.7 times better than Obama so far.

I'd take it in a heartbeat.

Obama Is Going To Finish His Presidency With The Worst GDP Performance Since World War Two

The Bureau of Economic Analysis reports here today its third and final estimate of Q4 2013 GDP at 2.6%, up from 2.4% in the second estimate. 2013 overall remains stuck at 1.9%, another paltry sum in the fourth full year after the so-called Great Recession ended.

Obama's average report for the five years 2009-2013 is 1.24%, the worst in the post-war.

Bush's average report at 2.13%, the worst up to the time, was 1.7 times better than Obama's to date.

Even if Obama racks up 3.5% real GDP growth in each of the next three years 2014, 2015 and 2016, he'll still end up with a worse record than Bush and the worst record since World War Two.

What a complete and utter loser.

Huge Revision DOWN To Q4 2013 GDP, 25%, From 3.2% To 2.4% In Second Estimate

From bea.gov here:

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 2.4 percent in the fourth quarter of 2013 (that is, from the third quarter to the fourth quarter), according to the "second" estimate released by the Bureau of Economic Analysis.  In the third quarter, real GDP increased 4.1 percent. The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month.  In the advance estimate, the increase in real GDP was 3.2 percent. With this second estimate for the fourth quarter, an increase in personal consumption expenditures (PCE) was smaller than previously estimated . . ..

How The 2009 Stimulus Has Hidden The Obama Decline

As everyone knows by now, when the Democrats swept into power in the 2008 election one of the first things they did was pass the stimulus spending bill in February 2009, five years ago this month.

The passage of the stimulus has been a boon to Democrats and their program. One, the added spending for fiscal 2009 got charged to George Bush's account, not Obama's, making Bush's spending record look worse than it was. Two, the added spending became the new baseline for spending in every year since, keeping government big, its most insidious affect. Three, because Republicans retook the House in 2010, spending in 2011 and 2012 has had to hew more closely to what it was in 2009 because of Tea Party demands to put the brakes on spending, allowing Obama to brag that he's kept government spending increases low for a longer period of time than has been usual. This is sort of like how Obama takes credit for our oil production boom, which happens in spite of him on private lands, not because of him.

What's so disturbing about the increase to baseline spending is that over 75% of the GDP gains for 2009 through 2012 can be attributed to that, not to anything real in the US economy. In other words, GDP growth from government spending has been propping up reported GDP and masking the severity of the current economic depression in which millions of homeowners remain underwater, similar millions remain without work after five years, and those still working suffer under a real multi-year decline in their earnings because of stagnant wages and increased costs for food, energy, clothing, healthcare and taxes. The middle class is being pushed inexorably downward. Like the infamous Climategate emails which showed an effort by scientists to hide the decline in global temperatures over the last decade, US government spending has been doing the same for the decline of GDP.

The figures are startling.

Using 2008 as the baseline from Table 3A of the Bureau of Economic Analysis's summer 2013 comprehensive revision of GDP ($14,720.3 billion), the net increase to GDP in nominal dollars for each year 2009 through 2012 relative to 2008 was $2.8782 trillion:

2009    -302.4 billion dollars

2010   +238.0

2011   +813.5

2012 +1524.3.

Similarly, using 2008 as the baseline for federal outlays as tracked by the Tax Policy Center using figures from the OMB ($2,982.5 billion), the net increase to federal spending in nominal dollars for each year 2009 through 2012, again, relative to 2008, was $2.1841 trillion:

2009 +535.2 billion dollars

2010 +473.7

2011 +620.6

2012 +554.6.

Thus the nominal gain in GDP relative to 2008 for all four years apart from nominal increases to government spending has been all of $694.1 billion, for a gain overall of 4.71% since 2008, 1.17% per annum on average, one of the most appalling records in all of American history because that figure is not adjusted for inflation. The all items CPI has risen 19.388 seasonally adjusted between January 1, 2009 and January 1, 2013, an increase of 9.1% which completely wipes out the nominal GDP gain of 4.71%.

So GDP has actually been negative for the whole of Obama's first term, but completely hidden from view by the increase to baseline spending caused by the 2009 stimulus. If it has felt like a depression, it's because it is one.

Q4 2013 Real GDP At 3.2% In 1st Estimate, Q3 Remains At 4.1%

The BEA reports here.

Change in private inventories added far less in Q4 than in Q3, just .42 points vs. 1.67.

As good as the second half of 2013 appears, real GDP for 2013 still clocks in at an anemic 1.9% vs. 2.8% in 2012.

Q3 2013 GDP Third Estimate At 4.1%, But Inventories Constitute 41% Of That

The BEA reports here:

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 4.1 percent in the third quarter of 2013 (that is, from the second quarter to the third quarter), according to the "third" estimate released by the Bureau of Economic Analysis.  In the second quarter, real GDP increased 2.5 percent. The GDP estimate released today is based on more complete source data than were available for the "second" estimate issued on December 5, 2103.  In the second estimate, the increase in real GDP was 3.6 percent (see "Revisions" on page 3).  With this third estimate for the third quarter, increases in personal consumption expenditures (PCE) and in nonresidential fixed investment were larger than previously estimated. ...  The change in real private inventories added 1.67 percentage points to the third-quarter change in real GDP, after adding 0.41 percentage point to the second-quarter change. Private businesses increased inventories $115.7 billion in the third quarter, following increases of $56.6 billion in the second quarter and $42.2 billion in the first.

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That's a huge inventory number compared to the recent past.

Personal consumption expenditures, which in the second estimate came in at a paltry 1.4%, suddenly are revised up 0.6 to 2.0% in the third estimate, also contributing significantly to the up revision of GDP. In the second estimate it looked like the consumer was pulling back by over 20% from the second quarter. In the third estimate it now appears the consumer ramped it up by over 10% in Q3 compared to Q2, quite the reversal.

Someone wanted to go home early: Both reports in html and pdf say "December 5, 2103".

Hey. They're just numbers. Time for a beer. 

Second Estimate Of Q3 2013 GDP Rises To 3.6% From 2.8% In The Initial

The report from the Bureau of Economic Analysis is here, showing Q3 2013 real GDP growing at a 3.6% clip. 

1.68 points of the 3.6, however, represents building of massive inventories, meaning the underlying rate is 1.9%, down from last month's 2.0% after stripping out inventories. The first estimate of inventories had been off by 100%.

Falling demand from consumers in the third quarter was indicated as personal consumption expenditures (PCE) grew at a rate 0.4 lower, at 1.4% vs. 1.8% in the second quarter, a drop of 22%. In the first estimate PCE had been estimated at 1.5% in the third quarter. The decline confirms the ongoing weakness of the consumer economy.

GDP For Q3 2013 At 2.8% Annualized In The First Estimate, Released Today

click to enlarge

The report in pdf from the Bureau of Economic Analysis may be found here.

The average report of GDP in 2013 now stands at 2.13% (1.1%, 2.5% and 2.8%), while growth measured in the 3rd quarter on an annualized basis is running at 2.8%.

Assuming GDP in the third and fourth quarters finishes sufficiently strongly enough to lift the year to a growth rate of 2.8% overall when next year's final estimate of GDP for Q4 2013 is complete, Obama's five year record will be an average report of 1.4%, still the lowest in the post-war behind George W. Bush's 2.1%.

But that assumption may be too rosy.

The GDP range for 2013 projected by the Federal Reserve in its June report is just 2.3% to 2.6%, so it remains very possible that 2013 GDP will finish the year at something less than the current 2.8%, especially as the ObamaCare Tax, in the form of higher health insurance premiums and other taxes, whacks the only people with the spending money in this economy.

Janet Yellen's Crystal Ball Utterly Failed Her In May 2007: She Never Saw The Crisis Coming

(as always, click on the image to enlarge)

“Taking a longer view, I anticipate real GDP growth over the next two and a half years [2008 & 2009] of about 2.6 percent, just a bit below my assessment of potential. My forecasts of both actual and potential growth are a tenth or two stronger than the Greenbook forecasts; but the basic story is very similar, and the underlying assumptions, including the path for the nominal funds rate, are essentially the same. I view the stance of monetary policy as remaining somewhat restrictive throughout the entire forecast period. The key factors shaping the longer-term outlook include continued fallout from the housing sector, with housing wealth projected to be roughly flat through 2008. Given the reduced impetus from housing wealth, household spending should advance at a more moderate pace going forward than over the past few years.” (Quoted here)

Obama Keeps Michelle's Website, letsmove.gov, Up During The Shutdown, But Not bea.gov

letsmove.gov is open for business during the shutdown

bea.gov is not

Q2 2013 GDP 2.5% Annualized In 3rd Estimate, Nearly 11% Lower Than In 2012

The full GDP report from the BEA is here.

Subdued growth in the last three quarterly reports, 0.1% for the last quarter of 2012, 1.1% in Q1 and now 2.5%, in part reflects on-going effects from Hurricane Sandy last November, little remarked in the press since then probably because of all the heat Obama got in 2011 for blaming exogenous events for poor GDP performance, but correctly forecast by Rosie in the instance.

Since about 25% of GDP is government spending at any given time, the real economy is piddling along at about 1.88%.

Obama's Appallingly Bad GDP Reports For The Last 3 Quarters Average +1.23%

Revised GDP Q2 2013 was reported this morning UP at 2.5% from 1.7%. Q1 remains at 1.1% and Q4 2012 remains at 0.1%

Truly abysmal figures, despite the revision.

The news release from the BEA is here:

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 2.5 percent in the second quarter of 2013 (that is, from the first quarter to the second quarter), according to the "second" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 1.1 percent.

The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month. In the advance estimate, the increase in real GDP was 1.7 percent. With this second estimate for the second quarter, the increase in exports was larger than previously estimated, and the increase in imports was smaller than previously estimated (see "Revisions" on page 3).

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A rate of 2.5% in Q2 is much better than 1.7% to be sure, but hardly commensurate with a recovery. The last three quarters now yield an average report of 1.23% instead of 0.97% prior to today's revised report. Woo Hoo! Compared to 2.8% for all of 2012, Obama's best year (cough), the 2013 figures which yield an average report of 1.8% to date are also appallingly bad.

This would be a good time for the president to begin doing his job, except he has no clue what it is. 

most recent quarterly figures

most recent annual figures

Rush Limbaugh Finds A GDP Conspiracy Where There Is None

When it comes to numbers, I have observed that Rush Limbaugh can be counted on to get something horribly wrong, and today was no exception. Today he has misrepresented the routine revision of the GDP data every five years as a revision of the numbers for only the last five years, as if it were designed specifically to make Obama look better. In actual fact, the revision of the numbers goes back not five years, but all the way back to 1929.

Truly incredible, and embarrassing in the extreme, since the truth is the revision occurs every five years, and this is the 14th revision in the series. This is why conservatives hope Rush retires soon, nevermind why liberals hope he retires. He's making us all look stupid when he carries on like this.

I have shown "five" in red below from today's Rush transcript so you can appreciate the thorough-going depth of Rush's misrepresentation of the facts: 

RUSH:  Here's what the Commerce Department is doing. 

They have "made changes to how it calculates gross domestic product," going back five years. "At the same time, the government also went back and revised data for the past five years, to reflect more complete as well as additional statistics from a variety of sources, such as the Internal Revenue Service and the US Department of Agriculture." They have made changes to how they're calculating the gross domestic product, or economic growth, and what they're doing now is they're going back five years. 

They have revised data for the past five years to, they say, "reflect a more complete, as well as additional statistics from a variety of sources, such as the IRS and the Department of Agriculture.  Why do you think they decided to go back the last five years to revise data?  To rewrite the horrible 4-1/2 years of Obama.  There's no question.  I don't know if it's fraudulent, but they're cooking the books -- and after cooking the books, after making it look as good as they can, it's 1.7% economic growth.

Here, however, is the statement from the BEA in today's official release about the routine revision every five years, which has been telegraphed to every reader of BEA GDP reports for many quarters running going back at least to last year (meaning Rush Limbaugh has never read even cursorily a single one of those GDP reports from the BEA in the interim, let alone today's):

Today, BEA released revised statistics of gross domestic product (GDP) and of other national income and product accounts (NIPAs) series from 1929 through the first quarter of 2013. Comprehensive revisions, which are carried out about every 5 years, are an important part of BEA's regular process for improving and modernizing its accounts to keep pace with the ever-changing U.S. economy.

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1.7% GDP in Q2 2013 is horrible enough, but the average report for the last three quarters comes in under 1%, 0.966% to be exact. So if there is some conspiracy to make things look better than they are, whoever's in charge of that ought to be fired, stat!

This country remains in deep trouble, and there is no conspiracy to hide it. 

First Report Of Q2 2013 GDP At 1.7%, Q1 Revised Down To 1.1% From 1.8%, Q4 2012 Down To 0.1% From 0.4%

The press release, excerpted below, from the BEA is here, the full pdf with the 14th revision of the comprehensive GDP data is here. The revisions lower in the prior two quarters combined with the low 1.7% first report in Q2 2013 should be extremely troubling to everyone. The economy is crawling.

"Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 1.7 percent in the second quarter of 2013 (that is, from the first quarter to the second quarter), according to the "advance" estimate released by the Bureau of Economic Analysis.  In the first quarter, real GDP increased 1.1 percent (revised). The Bureau emphasized that the second-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3 and "Comparisons of Revisions to GDP" on page 18).  The "second" estimate for the second quarter, based on more complete data, will be released on August 29, 2013. The increase in real GDP in the second quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, nonresidential fixed investment, private inventory investment, and residential investment that were partly offset by a negative contribution from federal government spending. Imports, which are a subtraction in the calculation of GDP, increased. The acceleration in real GDP in the second quarter primarily reflected upturns in nonresidential fixed investment and in exports, a smaller decrease in federal government spending, and an upturn in state and local government spending that were partly offset by an acceleration in imports and decelerations in private inventory investment and in PCE."

Moronic Shills For Obama At CNBC Call 1.7% GDP "Upbeat"

Only ignoramuses or liars would call GDP of 1.7% "upbeat", so take your pick. Charity demands the former, but I'm fresh out of it.

It is now four years to the day since Ben Bernanke pointed to the need for 2.5% GDP to reduce unemployment (here):

'Bernanke's core message was similar to that he delivered last week in congressional testimony: that the recession should end soon, but that considerable risks remain -- especially relating to the labor market. It takes GDP growth of about 2.5 percent to keep the jobless rate constant, Bernanke noted. But the Fed expects growth of only about 1 percent in the last six months of the year. "So that's not enough to bring down the unemployment rate," he said.'

The Bureau of Economic Analysis comprehensive revision of GDP and related measures going back decades, available here in pdf of 83 pages, now shows the last three quarters to be truly abysmal for this point in a so-called recovery: growth of 0.1%, 1.1% and 1.7% in the last three quarters. Obama's best year to date, 2012, now comes in at a measly 2.8%, far off the new post-war average of 3.4%.

There's nothing upbeat about any of it.

Sleeper Story Of The Day: Q1 GDP Revised DOWN To 1.8% From 2.4%

While everyone was fixated on Supreme Court rulings involving homosexuality, the third and final report of GDP for Q1 2013 got buried in the avalanche. A good place for it, too, seeing how bad it was.

The BEA reported here:

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 1.8 percent in the first quarter of 2013 (that is, from the fourth quarter to the first quarter), according to the "third" estimate released by the Bureau of Economic Analysis.  In the fourth quarter, real GDP increased 0.4 percent.

The GDP estimate released today is based on more complete source data than were available for the "second" estimate issued last month.  In the second estimate, real GDP increased 2.4 percent.  With the third estimate for the first quarter, the increase in personal consumption expenditures (PCE) was less than previously estimated, and exports and imports are now estimated to have declined (for more information, see "Revisions" on page 3).

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Poor growth is entirely apropos to the situation. Preoccupied by our own narcissism, we aren't PRODUCING.

GDP For Q1 2013 Revised Down To 2.4% From 2.5% In Second Estimate

From the report of the Bureau of Economic Analysis, here:

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 2.4 percent in the first quarter of 2013 (that is, from the fourth quarter to the first quarter), according to the "second" estimate released by the Bureau of Economic Analysis.  In the fourth quarter, real GDP increased 0.4 percent.

The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month.  In the advance estimate, real GDP increased 2.5 percent.

To put the second estimate of Q1 2013 real GDP in context, a real rate of growth of 2.4% now is just slightly ahead of the average report of 2.23% during George W. Bush's first term in office. But compared to Barack Obama's first term, it's a world of difference from his performance in his first term with a paltry 0.83% average report.

That said, it used to be the opinion of Ben Bernanke, the Federal Reserve chairman, back in July 2009 that we needed 2.5% growth just to keep the jobless rate constant. That's why under Bush it took so long for jobs to recover after 911. And it's why jobs are taking so long to recover now. With growth of just 2.4%, going forward all we can expect is the current level of unemployment. And you can forget about putting the millions who lost their jobs in the recent financial panic back to work in decent jobs, maybe ever.

Big Deal: Debt To GDP Ratio Comes In At 105%

The debt as of 4/24/13 was $16.7943 trillion. GDP in the latest report was $16.0102 trillion. So the one divided by the other yields 1.05, or 105%. To which I say, Big deal.

In other words, the current annualized national income no longer is sufficient to cover what we owe. But there is no situation in which anyone stops consuming and simply works for a year to pay off everything one owes. At this you'd last maybe 40 days if you were Jesus Christ, but trust me, you aren't Jesus Christ. This is not the way to look at it. Instead, we should look at the debt like a mortgage.

Interest payments on this ever-growing debt in fiscal 2012 came to $360 billion, implying an interest rate paid of a little more than 2%. This rate is artificial. It is the result of manipulation afforded to us by the Federal Reserve's deliberate policy we affectionately call ZIRP, zero interest rate policy, which pushes long term interest rates down into the cellar. A more realistic rate would be double that, 4%, about a half point higher than current averages for 30-year mortgages (call it an extra penalty for having less than AAA status if you want). So, if one were to treat the total public debt outstanding like a mortgage amortized over 30 years at 4% fixed, our "mortgage" payment to pay off the debt would be $80.304 billion monthly, or about $964 billion a year. And you'd have to stop deficit spending.

In the current spending environment, $964 billion annually is about 25% of current government outlays of $3.8 trillion. Current government receipts, however, have lagged the outlays by about $1 trillion annually, so the "mortgage" payment would be closer to 35% of income.

Responsible persons all over this country pay off mortgages with that percentage of income devoted to debt service, and they do it all the time. It's high time the federal government started acting like them. In order to do so, however, current spending apart from the "mortgage" payment would have to be cut $1.96 trillion annually, or 48%, to $1.84 trillion annually for all programs. (That squealing you hear is the sound of stuck pigs).

Somebody get on this right away.     

Q1 2013 Real GDP First Estimate At 2.5%, Q4 2012 Remains At 0.4%

So reports the BEA here:

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 2.5 percent in the first quarter of 2013 (that is, from the fourth quarter to the first quarter), according to the "advance" estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 0.4 percent.

Inflation-adjusted GDP under Obama continues to print in a narrow low range, averaging just 0.83% from 2009 through 2012, the worst on record in the post-war. With an average annual report of 2.04% under George Bush, economic growth was almost 2.5 times better under Bush than under Obama. GDP under Bush only seemed so bad because growth under Clinton's second term was so good at 4.5% per year.

In order to best George Bush's lacklustre record, Barack Obama is going to have to put up average real GDP numbers every year 2013 through 2016 of at least 3.5%.

At 2.5% in today's report, he's already off to a very slow start.

Big Whoop: Final Report Of Q4 2012 GDP Comes In At +0.4%

(click the images, as always, to enlarge)

The report from the Bureau of Economic Analysis is here:

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 0.4 percent in the fourth quarter of 2012 (that is, from the third quarter to the fourth quarter), according to the "third" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 3.1 percent.

The pathetic performance is being hailed as good news. It is, like when the guy with the drill stops boring holes in your head, but only good relative to the first awful estimate.

This final revision is a huge revision up from the first estimate of -0.1% and the second of +0.1%. Suddenly growth in the 4th quarter is 4 times better than it was just a month ago. Yet even at that these are remarkable depths for US GDP to be in when the recession is supposed to be long over since 2009.

Speaking of which, it was said by Ben Bernanke back then, here in July 2009, that growth of 2.5% was necessary to keep the unemployment rate constant. So why is unemployment coming down? Even after today we still have growth roundable to zero in Q4, but the unemployment numbers magically came down anyway, from 8.1% last August to 7.7% in February 2013. If weak GDP is having a long term affect on unemployment, I don't see it. Even today's annual averages in the 1.8% and 2.2% range in the report for the last two years do not support Bernanke's assertion in 2009. Unemployment has come down despite such anemic growth rates. And if anything, we should have seen a gradual uptick in unemployment over the last two years because GDP has been insufficient to keep it constant. I don't think Bernanke really knows what he's talking about, and just makes this stuff up to mollify people at the time as he pursues his only real goal: keeping the banks afloat. Everything else is just for public consumption.

And you can put that in your Easter basket, and crack it.