Final Q1 GDP Crashes To -2.9%, Lowest Since 2009, Far Below The Worst

http://www.zerohedge.com/news/2014-06-25/gdp-disaster-final-q1-gdp-crashes-29-worst-2009-far-below-worst-expectations


GDP Disaster: Final Q1 GDP Crashes To -2.9%, Lowest Since 2009, Far Below The Worst Expectations





Zero Hedge
June 25, 2014

Remember when in January 2014, Q1 GDP was expected to rise 2.6%? Well, here comes the final Q1 GDP revision and it’s a doozy: at -2.9%, far below the -1.8% expected and well below the -1.0% second revision, it is an absolute disaster, and is the worst print since Q1 2009.

And while a bad GDP print was largely expected, the driver wasn’t: personal consumption expenditures somehow crashed from 3.1% to just 1.0%, far below the 2.4% expected, meaning that all hope of a consumer recovery is dead. Finally, as a reminder, US GDP has never fallen more than 1.5% except during or just before an NBER-defined recession since quarterly GDP records began in 1947. Good luck department of truth propaganda machine, because even assuming 3% growth every other quarter in 2014 means 2014 GDP will be 1.5% at best!

GDP long-term:

.zerohedge.com/sites/default/files/images/user5/imageroot/2014/06/GDP Q1 LT_1.jpg][/url]

And GDP broken down by components:

.zerohedge.com/sites/default/files/images/user5/imageroot/2014/06/GDP final revision.jpg][/url]

For some context, this is a 6 standard deviation miss – as economists were striongly biased to the upside beat…

A D V E R T I S E M E N T

 

Do you believe in miracles?



 

Source: Dept of Commerce

And yet they blame it on the bad winter.

 

http://www.caintv.com/brutal-1q-gdp-revised-downward


Horrendous.

First you heard that the economy was weak the first part of the year, when the government announced that GDP growth had been only 0.1 percent. Then you heard there was actually no growth at all, as the government revised its estimate to minus-1.0 percent. Yeah, it not only didn't grow. It shrunk.

But today we learn how truly horrendous the economy has become under the policies of Barack Obama, as the government admitted that the actual economic output of the nation shrank by an astounding 2.9 percent in the first quarter of 2014.

How bad it that? It's the worst in five years, and it's way too bad for Obama to get away with blaming the weather, as he tried to do when the original sucktastic estimate came out. Everything is horrible, but especially exports:

Quote :

Real personal consumption expenditures increased 1.0 percent in the first quarter, compared with an increase of 3.3 percent in the fourth. Durable goods increased 1.2 percent, compared with an increase of 2.8 percent. Nondurable goods decreased 0.3 percent, in contrast to an increase of 2.9 percent. Services increased 1.5 percent, compared with an increase of 3.5 percent.
Real nonresidential fixed investment decreased 1.2 percent in the first quarter, in contrast to an increase of 5.7 percent in the fourth. Nonresidential structures decreased 7.7 percent, compared with a decrease of 1.8 percent. Equipment decreased 2.8 percent, in contrast to an increase of 10.9 percent. Intellectual property products increased 6.3 percent, compared with an increase of 4.0 percent. Real residential fixed investment decreased 4.2 percent, compared with a decrease of 7.9 percent.
Real exports of goods and services decreased 8.9 percent in the first quarter, in contrast to an increase of 9.5 percent in the fourth. Real imports of goods and services increased 1.8 percent, compared with an increase of 1.5 percent.
Real federal government consumption expenditures and gross investment increased 0.6 percent in the first quarter, in contrast to a decrease of 12.8 percent in the fourth. National defense decreased 2.5 percent, compared with a decrease of 14.4 percent. Nondefense increased 5.9 percent, in contrast to a decrease of 10.0 percent. Real state and local government consumption expenditures and gross investment decreased 1.7 percent; it was unchanged in the fourth quarter.
The change in real private inventories subtracted 1.70 percentage points from the first-quarter change in real GDP, after subtracting 0.02 percentage point from the fourth-quarter change. Private businesses increased inventories $45.9 billion in the first quarter, following increases of $111.7 billion in the fourth quarter and $115.7 billion in the third.
Real final sales of domestic product -- GDP less change in private inventories -- decreased 1.3 percent in the first quarter, in contrast to an increase of 2.7 percent in the fourth.

So basically, everything is going wrong with this economy. By the way, Gross National Product (which includes receipts on income from the rest of the world) was even worse, declining 3.6 percent.

The real travesty here is that healthy sustained economic growth is the only way out of the debt fiasco that has exploded since Obama took office. Balancing the budget and starting to make progress of actually paying down debt (without adding even more debt to do so) requires a combination of spending cuts and revenue increases that come from growth, not from higher tax rates. Our fearless leaders in Washington are convinced that more spending will bring about healthy growth. That has been the philosophical conceit of Keynesians for as long as anyone can remember. And it has now given us the craptastic reality of a collapsing GDP more than five years into Obama's grand experiment in activist government.

Supposedly Obama is now getting ready to "pivot to the economy" for the umpteenth time, since everything else under his oversight is going haywire too, and he needs something else to talk about.

By all means, Mr. President, we can't wait to hear how you explain this one away.

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