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Consumer Metrics Institute News: July 30, 2010 – Inside the New GDP Numbers
Consumer Metrics Institute News: July 30, 2010 - Inside the New GDP Numbers
Courtesy of Rick Davis at Consumer Metrics Institute
Bureau of Economic Analysis (’BEA’) released its "advance" estimate of the annualized growth rate of the U.S. Gross Domestic Product (’GDP’) during the 2nd quarter of 2010. Per their report, the GDP grew during the quarter at an annualized rate of 2.4%, down from 3.7% in the 1st quarter of 2010. Several points from the report merit comment:
* Readers familiar with prior GDP reports will be more surprised by the reported 1st quarter growth as by the new 2nd quarter number (which had been leaked by Mr. Bernanke last week), since only last month the Q1 of 2010 was supposedly growing at a 2.7% rate. Why did the Q1 number suddenly get altered upward by 1%? The BEA quietly revised the 1st quarter inventory adjustment up to a level that represents a 2.64% component within the revised 3.7% figure, with 1st quarter "real final sales of domestic product" now reported to be growing at a modestly improved 1.06% annualized clip, compared to the 0.9% number reported last month. In short, factories were piling on inventory at a substantially higher rate than previously thought, while the "real final sales" remained anemic.
* The 2.4% figure will garner all of the headlines, but the more important "real final sales of domestic product" continues to be weak, growing at a reported 1.3% annualized rate. The real cause for concern is that the reported inventory adjustments dropped from a 2.64% component in the revised 1st quarter to a 1.05% component during the 2nd quarter. If factories have begun to realize that end user demand remains anemic, the inventory adjustments could well go negative soon, pulling the reported total GDP down with it.
(Click on chart for fuller resolution)
* The BEA revised much more than the first quarter of 2010. They revised down 2009, 2008 and 2007 as well. Apparently the "Great Recession" has been worse than our government has previously reported. And the recovery’s brightest moment, Q4 2009, has been revised down from 5.6% to 5.0%. Similarly Q3 2009 dropped from 2.2% to 1.6%. And so on. The bottom of the recession was shifted back one quarter, with Q4 2008 now reported to have contracted at a -6.8% rate, revised down from the previously reported -5.4% rate. Most quarters of 2007, 2008 and 2009 have been revised down…
Trading Ideas
The lies keep coming...The
The lies keep coming...The economy is not growing, the depression is only beginning.
ye who take comfort in
ye who take comfort in statistics shall surely be condemned by them. The US by basing an economy on nothing more than the bottom line has dug itself into another depression. The difference now is that the frontiers are gone, the natural resources are drying up and we are stuck with obsolete ideas of politics and economics, waging wars on ghosts and selling our grandchildren to the Chinese.
The role of a free and
The role of a free and responsible media is to prevent the government from lying to the people it is supposed to represent. It is more clear every day that our current media is complicit in it's desire to purposefully mislead the public and advance a philosophical agenda.
To my uneducated eye, the "walk around test" clearly shows that things are not "recovering" or "expanding" but stagnant or contracting.
When will the average Joe finally wake up? Vote them all out!
I've awoken to vote them
I've awoken to vote them "out", but who to vote "in" is the question. The media would have me think that the current 2 party system is adequate. Flip-flopping the blame as they rotate in and out of power. 2 sides of the same coin, and the coin is counterfeit.
Figures don't lie, however
Figures don't lie, however liars do figure...
Would be interesting to
Would be interesting to overlay the Presidential Election Timetable on the chart and find out when the politicians started discussing the recession. Were they highlighting the storm while in it, or could their rhetoric have created/accelerated it?
Think we might find a correlation, since as we all know, during a political year, especially a presidential year, the main topic is "the economy stupid". Like Chicken Little, claim the sky is falling, generate fear, and just maybe it will be a self-fulling prophecy and have an impact on the election results.
Would be interested to see what others feel and if an impact was felt, who benefited?
I have to agree with some of
I have to agree with some of these posts...
I am here in Nevada, with 14% unemployment, and have been given the choice between Harry Reid (non motivated professional politician for life) and Sharron Angle (A wack job that is so far rught to make Rush "the pill head" seem inteligent!)
We need a third party, and those in both parties knew, that we of the blue Collar middle class, were seeing throught this, thus the "Tea Party" on the Right, and the "Progressive's" on the Left, who are still attached to the same two party's.
It is also why they wil not do much to limit the multi-national corporations pumping money into the campaigns, as proof in the FACT that the same money bags that got us "W" for two terms... financed Obama!
And I voted for this "I will make a dynasty for my Family name, before I help any one" President!
I have to agree with some of
I have to agree with some of these posts...
I am here in Nevada, with 14% unemployment, and have been given the choice between Harry Reid (non motivated professional politician for life) and Sharron Angle (A wack job that is so far rught to make Rush "the pill head" seem inteligent!)
We need a third party, and those in both parties knew, that we of the blue Collar middle class, were seeing through this, thus the "Tea Party" on the Right, and the "Progressive's" on the Left, who are still attached to the same two party's.
It is also why they wil not do much to limit the multi-national corporations pumping money into the campaigns, as proof in the FACT that the same money bags that got us "W" for two terms... financed Obama!
And I voted for this "I will make a dynasty for my Family name, before I help any one" President!
