Skip to comments.Economy barely expands in fourth quarter (revisal to earlier report of contraction)
Posted on 02/28/2013 8:46:43 AM PST by NormsRevenge
WASHINGTON (Reuters) - The U.S. economy barely grew in the fourth quarter although a slightly better performance in exports and fewer imports led the government to scratch an earlier estimate that showed an economic contraction.
Another report on Thursday showed a drop in new claims for unemployment benefits last week, adding to a string of data that suggests the economy improved early this year.
Gross domestic product expanded at a 0.1 percent annual rate, the Commerce Department said, missing the 0.5 percent gain forecast by analysts in a Reuters poll.
The growth rate was the slowest since the first quarter of 2011 and far from what is needed to fuel a faster drop in the unemployment rate.
Still, much of the weakness came from a slowdown in inventory accumulation and a sharp drop in military spending. These factors are expected to reverse in the first quarter.
"The breakdown remains consistent with more positive future growth," TD Securities said in a note to clients.
Consumer spending was more robust by comparison, although it only expanded at a 2.1 percent annual rate.
Because household spending powers about 70 percent of national output, this still-lackluster pace of growth suggests underlying momentum in the economy was quite modest as it entered the first quarter, when significant fiscal tightening began.
However, data on retail sales and from the housing market has suggested a tax hike enacted in January did not deal a big blow to households. Incomes have grown for U.S. families who have also made inroads in reducing their debt burdens.
Most economists think economic growth will pick up substantially by the end of the year although a wave of federal spending cuts due to begin on Friday are also expected to dampen economic growth in the first half of the year.
(Excerpt) Read more at finance.yahoo.com ...
Economy Expands at Weakest Pace Since 2011
yet economists remain optimistic.. or drunk or up for an O gig...
WAit until the revision to the revision comes out , “ Economy in rebound, massive recovery, green shoots all over, lawn mower needed.”
DOW 20,000 bitchez !
It's still fuzzy as to what exactly happened.
Fudged numbers to avoid a negative.
Today’s nominee for story ‘The Least Likely to Lead the Top of the Hour Newscast’.
Maybe THIS year will be the “Recovery Summer.”
Whew!!!! That’s a relief! I was beginning to think the economy was in trouble. /sarc
And the Dow keeps moving up? These dopes on Wall Street are suckers for Democrat lies.
Maybe THIS year will be the Recovery Summer.
"Unexpectedly," as they say in failed main stream "news" media economic reports, the revised numbers are a trifle less than rosy, but the self-appointed "experts" are "optimistic."
"Be warned as you read through this that GDP is carefully stated as a never-ending stream of self-referential percentage comparisons in order to carefully conceal the fact that GDP for the past several years has gone, essentially, nowhere. Which is why unemployment is offishully (sic) at 8% and more or less stuck. But, like the Founder said, We hold these Truths to be self-evident, and yada, yada, yada...
Which is why Ben the Printer had to admit yesterday that the helicopters printing up BenBux/FRN's were still flying missions and no, he wouldn't say when (or if ever) they would attempt to unwind the huge public investment in jacking up markets because that would shake confidence in what is already the world's biggest-in-history confidence game... Times like these make buying Tulip bulbs in 1630's look positively rational by comparison.
“The breakdown remains consistent with more positive future growth,” TD Securities said in a note to clients. “
We had to destroy the economy to save it.
This guy needs to go to the chiropractor after uttering a twisted statement like that.
Fed, printing money, buying securities.
This looks like insurance against the declaration of a recession when the 1Q13 GDP is announced. It takes two quarters of negative GDP to have an official recession.
Yep. It's all smoke and mirrors (which is why a bond crash is quickly coming our way. This printing of monopoly money can't go on forever. We're going to see inflation like we've never seen before.)
Good job, Oboma - NOT!!!
Bonds, to be honest, are the buying and selling of slave labor. The government gives us a number at birth. Every infant born in America is givien a dollar value. Their future labor is sold on the market as a bond.
There is very little labor going on in the U.S., and welfare is making it worse by the day. Right now, monopoly money is paying off our tally of bricks, because the slaves aren't working and producing. Other countries are either going to demand the U.S. government pay it's labor bills, or the other countries are going to come for the children, the slaves, the lifetime of labor they've already bought and paid for.
America is in a lot more trouble than most people think. We're not seen as humans by the elite. We're seen as livestock.
Yeah, 7.9% "nominal" unemployment. Yay!!!! We're doing great!!!!!
No surprise here given the net exports number that cam out after the flash GDP last month. Here’s Morgan Stanley’s take from client note sent out this morning:
* Close to our expectations, real GDP growth in Q4 was revised up to +0.1% annualized from -0.1%, with a substantial upward revision to net exports and stronger business investment in structures, reflecting better results for the December international trade and construction spending reports than BEA assumed, partly offset by lower inventories and lower state and local government spending. The trade revision boosted final sales (GDP excluding inventories) to +1.7% from +1.1%, while final domestic demand (GDP excluding inventories and trade) was little changed at +1.4% v. +1.3%. These results didn’t have any initial impact on our +1.6% Q1 GDP estimate. We’ll update that after full underlying details of this report are released after the personal income report Friday.
* Both exports (-3.9% v. -5.7%) and imports (-4.5% v. -3.2%) still show declines in Q4, but the latter more so now, boosting the net exports contribution to +0.24pp from -0.25pp in the advance report. The other main positive was business investment in structures (+5.8% v. -1.1%). The main negative offsets were inventories (-1.55pp contribution v. -1.27pp) and state and local government spending (-1.3% v. -0.7%).
* With federal defense spending and inventories still showing huge swings in Q3 and Q4, the former rising 12.9% then falling 22.0% and the latter adding 0.73pp then subtracting 1.55pp, the average 1.6% growth in the second half is a much better indication of the underlying trend than either the +0.1% in Q4 or +3.1% in Q3. And that’s right where we see Q1 tracking at this point.
* The first GDP revision includes revisions to personal income in the prior quarter based on updated data from the QCEW, the comprehensive data to which payrolls are benchmarked. Revisions were small this time, slightly net negative. Real disposable income growth is now +0.7% in Q3 and +6.2% in Q4 compared to +0.5% and +6.8% previously. This left the Q4 personal savings rate at 4.6% instead of 4.7%. Recall that Q4 income was sharply boosted by dividend and bonus payments that were accelerated to avoid higher tax rates. Reversal of this and the January tax hikes will lead to a steep drop in disposable income in Q1 and a decline in the savings rate to a post-recession low below 3% we estimate.
* Revisions to the price measures were minor. The core PCE price index was unrevised at +0.9% (sequential annual rate), a two-year low and well below the Fed’s 2% target. The overall GDP price index was revised to +0.9% from +0.6%, reflecting some upside in headline PCE inflation as annual seasonal adjustment revisions to CPI were incorporated.
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