Bull Trip!: GDP Report Q3 2011 (Third Rough Estimate)

Today, the Bureau of Economic Analysis (BEA) released their second "estimate" of the Q3 2011 GDP report showing that the economy continued to expand but at a notably slower pace than originally estimated with real GDP increasing at an annualized rate of just 1.8% from Q2 2011.

On a year-over-year basis real GDP increased 1.46% while the quarter-to-quarter non-annualized percent change was 0.45%.

The latest quarterly results indicate that the most notable source of weakness in the economy came from the change in private inventories component resulting in an overall contribution of -1.35% to GDP while government expenditures with non-defense spending declined 3.8% and state and local spending declined by 1.6%.

Fixed investment purportedly made notable contributions to Q3 GDP with non-residential fixed investment increasing 15.7% from Q2 2011 while residential fixed investment increased 1.3% over the same period.  

Keep in mind that these results are likely very poorly estimated and are sure to be revised notably in following quarters and even years to come.

Bull Trip!: GDP Report Q3 2011 (Second Rough Estimate)

Today, the Bureau of Economic Analysis (BEA) released their second "estimate" of the Q3 2011 GDP report showing that the economy continued to expand at a notably slower pace than originally estimated with real GDP increasing at an annualized rate of just 2.0% from Q2 2011.

On a year-over-year basis real GDP increased 1.51% while the quarter-to-quarter non-annualized percent change was 0.50%.

The latest quarterly results indicate that the most notable source of weakness in the economy came from the change in private inventories component resulting in an overall 0.9% decline to gross private domestic investment and government expenditures with non-defense spending declining 3.8% while state and local spending declined declined by 1.4%.

Fixed investment purportedly made notable contributions to Q3 GDP with non-residential fixed investment increasing 14.8% from Q2 2011 while residential fixed investment increased 1.6% over the same period.  
Personal consumption expenditures also increased notably increasing 2.3% from Q2 2011.

Keep in mind that these results are likely very poorly estimated and are sure to be revised notably in following quarters and even years to come.

Bull Trip!: GDP Report Q3 2011 (First Rough Estimate)

Today, the Bureau of Economic Analysis (BEA) released their first "estimate" of the Q3 2011 GDP report showing that the economy continued to expand with real GDP increasing at an annualized rate of just 2.5% from Q2 2011.

On a year-over-year basis real GDP increased 1.62% while the quarter-to-quarter non-annualized percent change was 0.61%.

The latest quarterly results indicate that the only notable source of weakness in the economy came from government expenditures with non-defense spending declining 3.7% while state and local spending declined declined by 1.3%.

Fixed investment purportedly made notable contributions to Q3 GDP with non-residential fixed investment increasing 16.3% from Q2 2011 while residential fixed investment increased 2.4% over the same period.  


Personal consumption expenditures also increased notably increasing 2.4% from Q2 2011.

Keep in mind that these results are likely very poorly estimated and are sure to be revised notably in following quarters and even years to come.

Bull Trip!: GDP Report Q2 2011 (Third Rough Estimate)

Today, the Bureau of Economic Analysis (BEA) released their third "estimate" of the Q2 2011 GDP report showing that the economy continued to weakly expand with real GDP increasing at an annualized rate of just 1.3% from Q1 2011.

On a year-over-year basis real GDP increased 1.63% while the quarter-to-quarter non-annualized percent change was 0.33%.

The latest quarterly results revealed an notable 5.3% decline in durable goods from Q1 2011 while non-durable goods showed the slowest growth since 2009 and the overall personal consumption expenditures registered the weakest showing in six quarters at 0.7%.

Government spending declined notably with the non-defense spending declining 7.6% from Q1 2011 while state and local spending declining 2.8%.

Non-residential structures supposedly expanded at an annualized rate of 22.6% from Q1 though future revisions will likely revise down this value resulting in an even weaker (possibly sub-1%) growth for overall GDP in the second quarter.

Bull Trip!: GDP Report Q2 2011 (Second Rough Estimate)

Today, the Bureau of Economic Analysis (BEA) released their second "estimate" of the Q2 2011 GDP report showing that the economy continued to weakly expand with real GDP increasing at an annualized rate of just 1.0% from Q1 2011.



On a year-over-year basis real GDP increased 1.55% while the quarter-to-quarter non-annualized percent change was 0.25%.



The latest quarterly results revealed an notable 5.1% decline in durable goods from Q1 2011 while non-durable goods showed the slowest growth since 2009 and the overall personal consumption expenditures registered the weakest showing in six quarters at 0.4%.



Government spending declined notably with the non-defense spending declining 7.5% from Q1 2011 while state and local spending declining 2.8%.



Non-residential structures supposedly expanded at an annualized rate of 15.7% from Q1 though future revisions will likely revise down this value resulting in an even weaker (possibly sub-1%) growth for the second quarter.

GDP Charade Just More Fake it Till You Make it Economic Policy

Hmm… notice anything striking about the chart above?

Let me draw your attention a bit closer.

Looking at the blue line, you see one of the most important market moving data-points, namely real GDP, as it stood just yesterday showing, more or less, a typical “V”-shaped recovery coming after the messy debacle of 2008.

Notice that not only did the recovery look vigorous, as of Q4 2010 the government reported that real GDP had surpassed the prior peak set in 2007.

So for about six months market participants (and other onlookers) believed that an important (possibly the most important) measure of economic health had completely recovered from the prior downturn.

Today though, the government released its annual revision to GDP taking down their prior quarterly “estimates” and reporting instead significant downward revisions to nearly every quarter from 2007 on.

The red line above is now the “official” estimate of real GDP and, needless to say, it’s painting a far weaker picture of performance of the macro-economy than the prior “estimates” with possibly the most notable anomaly being the fact that we have yet to see real GDP reach the level of the prior peak.

We already know that the government is engaging in “fake it till you make it” economic policy with its bailouts, the suspension of mark-to-market accounting, TARP, QE1 and QE2 etc. but this is really another matter altogether.

What is the use of estimates of GDP when the values are so far off?

Given that the stock market traded up on wildly phony GDP results, what should traders do now?

How can anyone believe that the stock market is a forward looking leading indicator (i.e. discounts the future) when participants are making trading decisions based on absurdly unreliable information?

Today’s GDP revisions should have been a significant blow to confidence as another notable sign of systemic weakness is recognized and the government’s clumsy charade is further disclosed.

Bull Trip!: GDP Report Q2 2011 (First Rough Estimate and Massive Revisions)

Today, the Bureau of Economic Analysis (BEA) released their first "estimate" of the Q2 2011 GDP report showing that the economy continued to weakly expand with real GDP increasing at an annualized rate of 1.3% from Q1 2011.

On a year-over-year basis real GDP increased 1.62% while the quarter-to-quarter non-annualized percent change was 0.32%.

Today's release also includes a regular annual revision to past years (three years) results bringing, in some cases, dramatically different assessment of the country's economic performance.

For example, Q1 2011 GDP was revised down from the reported 1.9% to a mere 0.4% while Q4 2010 GDP was revised down from 3.1% to 2.3%.

Q4 2009 GDP was revised down from the originally reported 5.0% to 3.8% while Q4 2008 was revised down from the reported -6.8% to the stunning -8.9%.

Note that the BEA has finally taken down their estimates for Q2 2010 (as I had predicted) residential fixed investment from the original lofty level of 25.7% to the still poorly estimated 22.8%... still to high.... look for that figure to be revised down further.

The latest quarterly results revealed an notable 4.4% decline in durable goods from Q1 2011 with personal consumption expenditures registering the weakest showing in eight quarters at 0.1% over the same period.

Government spending declined notably with the non-defense spending declining 7.3% from Q1 2011 while state and local spending declining 3.4%.

Bull Trip!: GDP Report Q1 2011 (Third Rough Estimate)

Today, the Bureau of Economic Analysis (BEA) released their second "estimate" of the Q1 2011 GDP report showing that the economy continued to expand with real GDP increasing at an annualized rate of 1.9% from Q4 2010.

On a year-over-year basis real GDP increased 2.33% while the quarter-to-quarter non-annualized percent change was 0.48%.

The latest report reveals an notable decline in non-residential fixed investment with non-residential structures declining at a rate of 14.8% from the fourth quarter 2010 while residential fixed investment also declined falling at a rate of 2.0% over the same period.

Note that the BEA has yet to take down their estimates for Q2 residential fixed investment which still sits at the lofty level of a supposed 25.7% quarter-to-quarter change... not likely.... look for that figure to be revised down in coming releases impacting the anemic "final" Q2 2010 results.

Government spending declined notably with the national defense component declining at a rate of 11.8%.

Bull Trip!: GDP Report Q1 2011 (Second Rough Estimate)

Today, the Bureau of Economic Analysis (BEA) released their second "estimate" of the Q1 2011 GDP report showing that the economy continued to expand with real GDP increasing at an annualized rate of 1.8% from Q4 2010.

On a year-over-year basis real GDP increased 2.31% while the quarter-to-quarter non-annualized percent change was 0.46%.

The latest report reveals an notable decline in non-residential fixed investment with non-residential structures declining at a rate of 16.8% from the fourth quarter 2010 while residential fixed investment also declined falling at a rate of 3.3% over the same period.

Note that the BEA has yet to take down their estimates for Q2 residential fixed investment which still sits at the lofty level of a supposed 25.7% quarter-to-quarter change... not likely.... look for that figure to be revised down in coming releases impacting the anemic "final" Q2 2010 results.

Government spending declined notably with the national defense component declining at a rate of 11.7% from the fourth quarter 2010 while in total government expenditures shaved 1.07% from overall GDP.

Bull Trip!: GDP Report Q1 2011 (First Rough Estimate)

Today, the Bureau of Economic Analysis (BEA) released their first "estimate" of the Q1 2011 GDP report showing that the economy continued to expand with real GDP increasing at an annualized rate of 1.8% from Q4 2010.

On a year-over-year basis real GDP increased 2.28% while the quarter-to-quarter non-annualized percent change was 0.43%.

The latest report reveals an notable decline in non-residential fixed investment with non-residential structures declining at a rate of 21.7% from the fourth quarter 2010 while residential fixed investment also declined falling at a rate of 4.1% over the same period.

Note that the administration (and the BEA) have yet to take down their estimates for Q2 residential fixed investment which still sits at the lofty level of a supposed 25.7% quarter-to-quarter change... not likely.... look for that figure to be revised down in coming releases impacting the anemic "final" Q2 2010 results.

Government expenditures declined notably with the national defense component declining at a rate of 11.7% from the fourth quarter 2010 and shaving 1.09% from overall GDP.

Bull Trip!: GDP Report Q4 2010 (Third Rough Estimate)

Today, the Bureau of Economic Analysis (BEA) released their third "estimate" of the Q4 2010 GDP report showing that the economy continued to expand with real GDP increasing at an annualized rate of 3.1% from Q3 2010.

On a year-over-year basis real GDP increased 2.78% while the quarter-to-quarter non-annualized percent change was 0.77%.

The latest report reveals an unexpected increase for housing with residential fixed investment increasing at a rate of 3.3% from the third quarter though additional revisions are needed to get something that resembles accuracy from this figure.

Note that the administration (and the BEA) have yet to take down their estimates for Q2 residential fixed investment which still sits at the lofty level of a supposed 25.7% quarter-to-quarter change... not likely.... look for that figure to be revised down in coming releases impacting the anemic "final" Q2 results.

Non-residential fixed investment in structures supposedly increased at 7.6% from the third quarter while the "change in real private inventories" began to bear down subtracting some 3.42% from real GDP after having worked to prop the value for five consecutive quarters.

Both imports and exports of goods and services worked to contribute positively to GDP with exports increasing at a rate of 8.6% while imports declined at a rate of 12.6% (counted as a contribution to GDP) from the third quarter.