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Q2 GDP Surges 4%, Beats Estimates Driven By Inventories, Fixed Investment Spike.....
ZeroHedge ^ | 6/30/2014 | Tyler Durden

Posted on 07/30/2014 6:11:49 AM PDT by mykroar

Moments ago the Commerce department reported Q2 GDP which blew estimates out of the water, printing at 4.0%, above the declining 3.0% consensus, as a result of a surge in Inventories and Fixed Investment, both of which added over 2.5% of the total print, while exports added another 1.23% to the GDP number. The full breakdown by component is shown below.

What is interesting is that the Commerce Department announced that as a result of incomplete June data, the biggest components of the GDP beat, Inventories and Trade, were estimated. In other words, assume that future revisions of Q2 GDP will be lower, not higher, as the actual data comes in, and especially as the CapEx data, which contrary to the GDP report, has not rebounded. Speaking of revisions, today the BEA also released its annual revision of all data from 1999 to Q1 2014, which made last quarter's -2.9% print a more palatable -2.1%, in the process throwing everyone's trendline calculations off as yet another GDP redefinition was implemented.

We are currently combing through the years of revisions and will provide a snapshot shortly but for the time being here is Bloomberg's take:



TOPICS: Business/Economy; Government; News/Current Events
KEYWORDS: estimate; gdp; inventory; q2
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Can't attach the graphs (I'm at work and our browser's about 3 generations behind).

Big point: the biggest components of the GDP beat, Inventories and Trade, were estimated. In other words, assume that future revisions of Q2 GDP will be lower, not higher

1 posted on 07/30/2014 6:11:49 AM PDT by mykroar
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To: mykroar
Full title

Q2 GDP Surges 4%, Beats Estimates Driven By Inventories, Fixed Investment Spike; Historical Data Revised

2 posted on 07/30/2014 6:12:20 AM PDT by mykroar (This is an insult to the nation's intelligence and these days, that isn't easy.)
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To: mykroar

Horse hockey.


3 posted on 07/30/2014 6:12:53 AM PDT by dfwgator
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To: mykroar

That Obama knows what he’s doing! I’ll vote for him!


4 posted on 07/30/2014 6:13:07 AM PDT by DIRTYSECRET (urope. Why do they put up with this.)
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To: mykroar

probably closer to zero once revised down.


5 posted on 07/30/2014 6:15:34 AM PDT by sappy (criminaldems)
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To: mykroar
What is interesting is that the Commerce Department announced that as a result of incomplete June data, the biggest components of the GDP beat, Inventories and Trade, were estimated. In other words, assume that future revisions of Q2 GDP will be lower, not higher, as the actual data comes in...

...in the process throwing everyone's trendline calculations off as yet another GDP redefinition was implemented.

In other words, they are simply making these numbers up. They are completely meaningless, driven only by the propaganda machine.

6 posted on 07/30/2014 6:17:07 AM PDT by ThunderSleeps (Stop obarma now! Stop the hussein - insane agenda!)
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To: sappy
I agree. Everywhere's dead when I'm going to/from work and there are so many empties everywhere that aren't getting refilled it's ridiculous. My brother and I both just shake out head. Whereever this growth is, it ain't here.
7 posted on 07/30/2014 6:17:49 AM PDT by mykroar (This is an insult to the nation's intelligence and these days, that isn't easy.)
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To: mykroar

All the talking points will be about this , and after the downward adjustments it will zero out somewhere down the road and only reported in some cattle futures magazine in Omaha that nobody reads
Freegards
LEX


8 posted on 07/30/2014 6:17:58 AM PDT by lexington minuteman 1775
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To: mykroar

Full title

“Q2 GDP Surges 4%, Beats Estimates Driven By Inventories, Fixed Investment Spike; Historical Data Revised”

Otherwise... Americans aren’t buying it, in more ways than one.


9 posted on 07/30/2014 6:18:41 AM PDT by DAC21
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To: mykroar

Meanwhile, ADP says job hires were well “below expectations”.

Obama’s Commerce Department is full of it.


10 posted on 07/30/2014 6:19:41 AM PDT by SoFloFreeper
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To: DAC21

Americans aren’t buying cuz they’re gambling their money away at casinos....


11 posted on 07/30/2014 6:19:45 AM PDT by Sacajaweau
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To: dfwgator

Yes, the phony numbers are equine excrement.


12 posted on 07/30/2014 6:20:12 AM PDT by twister881
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To: mykroar

Not a smidgen of accurate data...


13 posted on 07/30/2014 6:20:16 AM PDT by Hotlanta Mike (‘You can avoid reality, but you can’t avoid the consequences of avoiding reality.’)
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To: Sacajaweau
“Americans aren’t buying cuz they’re gambling their money away at casinos....”

And anti depressants.

14 posted on 07/30/2014 6:21:13 AM PDT by DAC21
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To: dfwgator

Yeah, and the unemployment rate really is 6.1%.

And in other news, unexpectedly...

Private Sector Adds 218,000 Jobs in July, ADP Reports

http://www.newsmax.com/Newsfront/ADP-Private-Sector-Jobs-Workers/2014/07/30/id/585726/


15 posted on 07/30/2014 6:22:09 AM PDT by Hotlanta Mike (‘You can avoid reality, but you can’t avoid the consequences of avoiding reality.’)
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To: mykroar

GDP is almost always revised down. That being said it’s not surprising (4% is a huge number but nobody believes it. Just like the -2.9% in 1Q - revised to -2.1% today - is not indicative). At the end of the day the economy will grow 1.5-2.0% for the full eyar. Right where we have been the last couple of years.


16 posted on 07/30/2014 6:23:04 AM PDT by Wyatt's Torch
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To: All

17 posted on 07/30/2014 6:24:52 AM PDT by Hotlanta Mike (‘You can avoid reality, but you can’t avoid the consequences of avoiding reality.’)
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To: mykroar

More government BS.


18 posted on 07/30/2014 6:24:56 AM PDT by mulligan (I)
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To: ThunderSleeps

LOL - everyone knows this. Every quarter. It is referred to as “Advance” numbers. It’s a “flash” report for those that work in corporate finance. It is always revised (there is a set schedule if you would like it).

And yes they are estimates. Of course they are. You cannot measure the economy exactly. It’s just not possible. Anyone who thinks there is an exact measurement of a $17+ trillion economy is an idiot.


19 posted on 07/30/2014 6:25:25 AM PDT by Wyatt's Torch
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To: mykroar

Surge in inventories. That’s got to be channel-stuffing; manufacturers pushing out goods to wholesalers. There will be no sell-through to the retail level; people simply don’t have any discretionary cash anymore. Rent, food, fuel and healthcare inflation and debt service take care of that. Watch for major adjustment of Q2 in the Q3 report.


20 posted on 07/30/2014 6:25:36 AM PDT by Paine in the Neck (Socialism consumes EVERYTHING)
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To: mykroar; All

supplied with copious amounts of 0’Mullah’s Dep’t. of Truth “special sauce” no Doubt.


21 posted on 07/30/2014 6:28:45 AM PDT by skinkinthegrass (The end move in politics is always to pick up a weapon...0'Mullah / "Rustler" Reid? d8-)
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To: mykroar

Analysis from Stone McCarthy Research:

Stone & McCarthy (Princeton) - This update contains our first impressions of the release of the U.S. GDP data. A full analysis will be available later as a separate update.

The BEA’s advance estimate of real GDP growth for Q2 2014 GDP growth was reported at 4.0% SAAR. The Q2 growth rate follows a 2.1% drop in real GDP in Q1 (previously -2.9%). The Q2 results were much stronger than expected. Consumer spending was firm, particularly for durable goods.

Non-residential fixed investment and exports also contributed to the gain.

Note: Previously reported data have been revised. The data incorporated in today’s report reflects the regular annual revision of the national income and product accounts (NIPAs), beginning with the estimates for the first quarter of 1999. Annual revisions, which are usually released in July, incorporate source data that are more complete, more detailed, and otherwise more reliable than those previously available.

Our estimate of 2.3% GDP growth compared with the median consensus of 3.0%. Market estimates ranged from 1.9% to 5.2%.

The FOMC is likely to regard the second quarter rise as a rebound from the soft first quarter. In the near-term it should not change the Committee’s overall outlook for winding down the asset purchase program, or advance the timing of the first hike in the fed funds rate.

Real PCE was strong, rising 2.5% in Q2 versus 1.2% in Q1.

In particular, PCE for goods rose by 6.2% SAAR versus 1.0% in Q1. However, PCE for services was 0.7%, down from +1.3% in Q1. The contribution to GDP from PCE was 1.69% versus our estimate of 1.1%.

Nonresidential fixed investment rose 5.5% versus +1.6% in Q1. Particularly, spending on structures rose 5.3%, up from +2.9% in Q1.

The contribution to GDP from inventories was +1.66% versus -1.16% in Q1 and -0.34% in Q4. We were expecting inventories to contribute 1.0% to GDP.

Exports made a positive contribution of 1.23% to GDP versus -1.30% in Q1.

The GDP price index rose at a 2.0% SAAR versus 1.3% in Q2 and 1.5% in Q1 2014.


22 posted on 07/30/2014 6:31:15 AM PDT by Wyatt's Torch
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To: mykroar

LOL

wait 4-6 weeks for the ‘revised’ numbers and you’ll see it’s been a loss...again


23 posted on 07/30/2014 6:31:42 AM PDT by sten (fighting tyranny never goes out of style)
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To: mykroar

(Checks Calendar....)

Yup. It’s an Election Year.


24 posted on 07/30/2014 6:33:03 AM PDT by Uncle Miltie (The GOP-e scum enlisted Democrats to steal the Republican primary. The GOP-e can go to Hell.)
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To: mykroar

25 posted on 07/30/2014 6:33:28 AM PDT by Wyatt's Torch
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To: sten

It’s always revised. And there’s a schedule. Here it is:

August 28 - 2Q14 1st revision
September 26 - 2Q14 2nd revision
October 30 - 2Q14 3rd revision and 3Q14 Advance

And there is no way it will be a “loss” (i.e. GDP negative growth). I’ll bet you $1000 on that right now.

BTW 1Q14 was revised up from -2.9% to -2.1%. 3Q13 and 4Q13 were also revised up.


26 posted on 07/30/2014 6:37:14 AM PDT by Wyatt's Torch
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To: mykroar

WSJ:

Takeaways from Wednesday’s GDP Report

Economic output rebounded during the second quarter, advancing at a 4% rate, and the large decline during the first quarter was revised down slightly, to a 2.1% decline from a 2.9% drop, according to estimates published by the Commerce Department on Wednesday.

Here are five quick takeaways from the report on gross domestic product, the broadest measure of goods and services produced across the economy:
30 Jul 2014 8:40am

Winter Rebound
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Wednesday’s GDP report shows a big jump in consumer spending on durable goods, such as cars and appliances, during the second quarter, a sign that consumers may have been playing catch-up after a rough winter. Spending on total goods accounted for its highest contribution to GDP since late 2010, and spending on durable goods was near a five-year high, led by a big jump in autos. Business investment also rebounded, with non-residential fixed investment up 5.5% in the second quarter after a gain of 1.6% in the first quarter.
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Housing’s Hiatus
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Housing contributed positively to economic growth during the second quarter—residential fixed investment added 0.23 percentage point to GDP—after subtracting from growth in the past two quarters. One reason why the current recovery has been considerably weak: It hasn’t enjoyed as strong a contribution from the housing sector as in past recoveries. Housing, which stopped being a drag on growth in 2011, added a small boost in 2012 and most of 2013. The decline that began last fall wasn’t actually due to a slowdown in home construction, but instead reflected a drop in brokers’ real-estate commissions after sales of previously owned homes slumped.
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Revisions Redux
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The second-quarter rebound in GDP looks even better in light of the fact that the last six months of 2013 was revised up, with growth advancing at the strongest pace since 2003, according to annual revisions to economic growth published by the Commerce Department on Wednesday. GDP in the third and fourth quarters increased at an annual pace of 4.5% and 3.5%, respectively, up from earlier estimates of 4.1% and 2.6%. The estimate of a 2.9% contraction for the first quarter, meanwhile, was revised up to a 2.1% decline.
The Fed’s Focus
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The latest GDP figures aren’t likely to immediately influence Federal Reserve policy makers as they conclude their two-day meeting this afternoon. The central bank is expected to cut its monthly bond purchases by another $10 billion. But the Fed’s forecast of economic growth in June projected annual growth of 2.1% to 2.3%. With the latest report, growth would need to exceed 3% in the second half to stay close to that forecast. Wednesday’s report also showed inflation narrowly exceeded the Fed’s 2% target during the quarter.
Bloomberg
The States Brighten
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Government spending turned positive in the second quarter after a sharp slowdown at the end of last year following the government shutdown. Government spending, which remained negative during the first quarter, rose 1.6% in the second quarter, and it was powered by state and local government spending, which was up 3.1% from the prior quarter, the largest such increase since 2009. State and local government spending boosted GDP by 0.35 percentage point, also a five-year high.


27 posted on 07/30/2014 6:42:46 AM PDT by Wyatt's Torch
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To: mykroar

Unprecedented and unexpected!


28 posted on 07/30/2014 6:43:13 AM PDT by Paladin2
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To: Uncle Miltie

With the economy fixed...King Putt is off to the links for a golf vacation.


29 posted on 07/30/2014 6:43:53 AM PDT by Beagle8U (Unions are an Affirmative Action program for Slackers! .)
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To: mykroar

Yesterday I stopped at a normally busy Subway for lunch. At 12:10 PM the place was empty. I chatted with the server. I was the third customer since opening a 8:00.


30 posted on 07/30/2014 6:49:59 AM PDT by SpeakerToAnimals (I hope to earn a name in battle)
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To: mykroar

GDP=Gross Depression Propaganda


31 posted on 07/30/2014 6:53:05 AM PDT by glyptol
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To: mykroar

Comrades! Comrades! The chocolate ration has been increased!!


32 posted on 07/30/2014 7:04:14 AM PDT by Gritty (Obama's governing as president of a Latin American republic, where only the president matters-MSteyn)
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To: Wyatt's Torch

Where can I find the set schedule?


33 posted on 07/30/2014 7:06:55 AM PDT by axxmann (If McCain is conservative then I'm a freakin' anarchist.)
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To: sten
A picture is worth 1000 words:


34 posted on 07/30/2014 7:11:05 AM PDT by Night Hides Not (Remember the Alamo! Remember Goliad! Remember Mississippi!)
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To: mykroar

Bull friggin’ crap... wait for this number to revised downward to 0.3% in about a month or two.


35 posted on 07/30/2014 7:11:57 AM PDT by Common Sense 101 (Hey libs... If your theories fly in the face of reality, it's not reality that's wrong.)
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To: axxmann

http://www.bea.gov/newsreleases/news_release_sort_national.htm


36 posted on 07/30/2014 7:12:00 AM PDT by Wyatt's Torch
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To: Beagle8U

King Putt....LOL!


37 posted on 07/30/2014 7:18:52 AM PDT by Jane Long ("And when thou saidst, Seek ye my face; my heart said unto thee, Thy face, LORD, will I seek")
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To: Paine in the Neck

No worries!!! Folks will just put it on their credit cards... 1 in 3 Americans are behind in their credit payments, average credit balances...$5,100.00...for now.


38 posted on 07/30/2014 7:22:33 AM PDT by Jane Long ("And when thou saidst, Seek ye my face; my heart said unto thee, Thy face, LORD, will I seek")
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To: Jane Long

I think it fits him to a Tee ( golf tee).

I’m surprised out photoshopping FReepers haven’t made some neat ‘King Putt’ gifs with that theme.


39 posted on 07/30/2014 7:24:58 AM PDT by Beagle8U (Unions are an Affirmative Action program for Slackers! .)
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To: Beagle8U

Not just gifs....but, I see a whole line of merchandising opportunities, as well. Hurry and get this going, before someone else does - you likely won’t get a mulligan ;)


40 posted on 07/30/2014 7:29:40 AM PDT by Jane Long ("And when thou saidst, Seek ye my face; my heart said unto thee, Thy face, LORD, will I seek")
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To: mykroar

I agree. Everywhere’s dead when I’m going to/from work and there are so many empties everywhere that aren’t getting refilled it’s ridiculous. My brother and I both just shake out head. Whereever this growth is, it ain’t here.
............
The growth is in the midwest and mountain states where the oil is.


41 posted on 07/30/2014 7:31:13 AM PDT by ckilmer (q)
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To: Jane Long

I wonder what it would cost to register/copy-write ‘King Putt’?


42 posted on 07/30/2014 7:45:46 AM PDT by Beagle8U (Unions are an Affirmative Action program for Slackers! .)
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To: ThunderSleeps

October numbers will be 2% unemployment and 7% GDP growth, then right after the Nov mids everything will be revised back to the REAL numbers which will of course be abysmal. They did it in 2008 to get Barry elected, again in 2012 to get him reelected so why not in 2014 to help the Dems?


43 posted on 07/30/2014 7:49:12 AM PDT by redangus
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To: Beagle8U

Not sure, but I see lots of opportunities....

King Putt deems that you’ve won this round.

King Putt will use his pen and phone...to make sure you’re under par.

King Putt bobbleheads for the golf carts....

King Putt shoe scrapers....

Endless possibilities ;)


44 posted on 07/30/2014 7:53:58 AM PDT by Jane Long ("And when thou saidst, Seek ye my face; my heart said unto thee, Thy face, LORD, will I seek")
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To: ckilmer

And the DC area. I was just there and they place is booming. Sky cranes working well into the night and all weekend.


45 posted on 07/30/2014 7:55:25 AM PDT by redangus
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To: Jane Long

How about a T-shirt that says...

“King Putt...when qualifications limit your options to golf or vacation.”

“King Putt...no problem so large that it can’t be forgotten on the golf course.”


46 posted on 07/30/2014 8:06:43 AM PDT by Beagle8U (Unions are an Affirmative Action program for Slackers! .)
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To: redangus
I see these figure as massaged, edited, and spun. The revisions to the methodology destroy any accuracy.
This boomlet of bogus numbers is just propaganda to help the Establishment get reelected. After the 2014 election, the real numbers will ooze out.
TWB
47 posted on 07/30/2014 8:17:06 AM PDT by TWhiteBear (Sarah Palin, the Flame of the North)
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To: mykroar

seems EVERY rosey prediction gets shot back down after the adults get involved.
This obammy gub mint blows., and LIES


48 posted on 07/30/2014 8:50:09 AM PDT by Joe Boucher ((FUBO) obammy lied and lied and lied)
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To: mykroar

The market isn’t too excited - Dow down 82 points.


49 posted on 07/30/2014 9:11:42 AM PDT by aquila48
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To: aquila48

That’s just because the market thinks the numbers are too good and the funny money might stop flowing.


50 posted on 07/30/2014 9:43:20 AM PDT by mykroar (This is an insult to the nation's intelligence and these days, that isn't easy.)
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