What’s Really Going on Inside the Latest GDP Number

OK Guys and Gals here on ATS, If Y'All remember just The Week Before Christmas (and All Through The House, LOL), we were told that The Economy here in The US Grew at a Five Percent Rate in The Third Quarter, Big Whoopy for us all, Right?

Well, this little article kinda clears things up for all of us, who care to take a look at what's really going on behind The Manipulated Numbers. It seems that most of The Increase in GDP was due to increased spending on OBAMACARE!

Now, I know it's Money being spent into the Economy. But Really, this is not Productive Consumer Spending by any stretch of The Imagination. What we have here is A Failure To Communicate THE TRUTH!

So, does anyone one of us have anything to say about this. To me this is an Abysmal Excuse for So Called Economic Growth.

Mods, I have placed this in The Global Meltdown Section. As always please fell free to move this anywhere you like at your discretion.

Thanks Y'All and Have A Happy Rest of Your Holidays. Peace, Arjunanda.


Economics / US Economy
Dec 27, 2014 - 12:31 PM GMT
By: Money_Morning


Shah Gilani writes: Sit down before you read this.

It’s going to make your head spin and, worse, change the way you think about what’s real in America.

However, this branch of the U.S. Department of Commerce, didn’t put its gift under anybody’s tree. They put it over all of us.

The gift was headline news that the “third revision” of third-quarter gross domestic product (GDP) showed the U.S. economy grew at a whopping 5% annualized rate, not the 3.9% rate posted in the “second revision.”

That sounds like good news, right?

Well, here’s what’s scary…

Bad Santa
“Ho! Ho! Ho!” said the stock market. Good news is now good news on top of bad news being good news for stocks.

And so, with just enough time before Christmas for the stock markets to react, we got a 5% “print” from the BEA, which pushed the Dow Jones Industrial Average above 18,000 while the S&P 500 made yet another all-time high.

Too bad the BEA is a Bad Santa. The latest revision was a “put-on.” The folks at the BEA put it over on all of us.

What they did to get to that 5% number – to make us all feel gifted by a robustly recovering economy, to get us to go out and spend spend spend, to get stocks to soar – was pure prestidigitation. It was pure legerdemain.

It was pure BS.

I’ll prove it to you. Here’s what the BEA posted on its website:

“The GDP estimate released today is based on more complete source data than were available for the ‘second’ estimate issued last month. In the second estimate, the increase in real GDP was 3.9 percent. With the third estimate for the third quarter, both personal consumption expenditures (PCE) and nonresidential fixed investment increased more than previously estimated (see ‘Revisions’ on page 3).
“The increase in real GDP in the third quarter primarily reflected positive contributions from PCE, nonresidential fixed investment, federal government spending, exports, state and local government spending, and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, decreased.

“The acceleration in the percent change in real GDP reflected a downturn in imports, an upturn in federal government spending, and an acceleration in PCE that were partly offset by a downturn in private inventory investment and decelerations in exports, in state and local government spending, in residential fixed investment, and in nonresidential fixed investment.”

In the second paragraph, the BEA says the increase “primarily reflected positive contributions from PCE, nonresidential fixed investment, federal government spending, exports, state and local government spending, and residential fixed investment.” Then in the very next paragraph, it says that “an upturn in federal government spending, and an acceleration in PCE that were partly offset by a downturn in private inventory investment and decelerations in exports, in state and local government spending, in residential fixed investment, and in nonresidential fixed investment.”

What?

How can you have an increase in PCE and the other stuff that was “partly offset by a downturn” in the same stuff the BEA said had increased?

I’ll tell you what’s going on.

Do Look This Gift Horse in the Mouth
The increase in personal consumption expenditures is all that matters. The BEA increased that number so much in the revision that nothing else matters.

Of course, its double-talk matters, but that’s just minor rubbish.

What the BEA gift-givers did in their revisionist juggling act was knock down personal savings by revising savings down over previous months by almost 20% and magically put all that money, about $140 billion, to work in the economy.

And presto, we had 5% GDP growth.

It gets funnier and freakier.

They said most of the increase in spending was on Obamacare. How many people do you know who bought into Obamacare last month?

They said last month we increased our gasoline and energy consumption by a whopping 4.1%. However, I recall oil prices falling almost 50% and gas prices falling more than 20% since late summer.

Go figure.

And about that PCE increase. We whooped it up spending on what? Christmas presents in July, August and September, long before Black Friday sales and Cyber Monday?

Maybe we did spend $140 billion earlier than we planned to spend on the holidays. Because we sure didn’t spend much on them.

According to most analysts, we saw disappointing Black Friday sales. And ShopperTrack had expected a $10 billion Super Saturday this year, but according to that analyst,sales on the last Saturday before Christmas were up only 0.5% from last year’s $9.1 billion.

RetailNext just said spending at specialty stores and large footprint retailers was down 8.9% over the weekend before Christmas versus a year ago. And traffic was down 10.2%.

We better be shopping online!

Okay, that’s getting ahead of the third-quarter numbers I’m talking about. But you get the point. How could we have spent $140 billion more in Q3 before the holiday season when the holiday season looks like a mini-bust?

Don’t even get me started on home sales.

Just say “Ho! Ho! Ho!” and enjoy the market rally while it lasts. The fabricators in our government bureaus are beholden to the powers that manipulate us all.

If it’s a feel-good feeling they want us to have, mission accomplished.

Happy holidays… suckers.

Source : www.wallstreetinsightsandindictments.com...
Christmas came early this year, for the market that is, by way of a gift from the U.S. Bureau of Economic Analysis.
www.marketoracle.co.uk..." target="_blank" class="postlink">www.marketoracle.co.uk...

The way I see it, everyone is manipulating their numbers at this point. It seems the reality of our economic recovery is mere stalling out, rather than sinking into financial Armageddon. That's definitely some improvement, but I would like it if people wouldn't freak over the reality, and if the government would be honest with it's people. That's just not reality.

OK bscheese, A Good thought out reply. Yes some Honesty from The .govs would be most appreciated by everyone. But, wether or not it's going to happen is an entirely different kettle of fish, I thinks. Good on ya and A Star for you. Peace Arjunanda. a reply to: pl3bscheese

Think ill just manipulate my numbers a little just like the government and Wall Street trader, first ill start printing some of my own paper money then ill hack my bank and add some zeros.

Oh wait.

ILL GO TO JAIL.

Weird.

originally posted by: Dabrazzo
Think ill just manipulate my numbers a little just like the government and Wall Street trader, first ill start printing some of my own paper money then ill hack my bank and add some zeros.

Oh wait.

ILL GO TO JAIL.

Weird.

Exactly.

Our doom started when the fed was established. Then turn to complete fiat currency in 1973. Make worthless cash, Tell us it REALLY is worth something, Loan us said cash with interest, then try to keep the system afloat as 'they' milk all the wealth from us 'they' can.

There is almost nothing left for them to milk. They are trying desperately to keep the system afloat and squeeze what little there is left. These numbers in the OP prove that.

The fat lady is running out of breath, and the whole corrupt system will cave in at OUR expense. While 'they' go hide in holes till the population gets whittled down to an acceptable number.

I just hope it happens soon so maybe my son can look forward to life after the inevitable crash, if he survives.

Good Reply Stosh64, Actually our Whole Economy is A System of Usury Backed by Violence. Once that comes to be understood, then everything else makes sense. Thanks for your reply and Peace Arjunanda. a reply to: stosh64

eh, Obama should have just nationalized healthcare.

it would have been far more simple, and far better for the american people to have redundant middlemen (insurance companies) cut out.

Yep NUN, It would also be a far sight cheaper as well. More FatGreedBags inserting themselves into every transaction, where they have No Business being. Good Reply and A Star For You Peace, Arjunanda. a reply to: NonsensicalUserName

originally posted by: arjunanda

Shah Gilani writes: Sit down before you read this.

First line above from someone I never heard of before and immediately added Fox News into the search engine.
You just know already don't you, the stock consolidating asides and common are,
Sit down....
Get this....
Would you believe....

Anyone know any more Fishwives tales. Apologies to the real Fishwives.

a reply to: smurfy

Some of us are not into economic matters. Would you care to better explain your post? I can't make heads or tails out of it.

originally posted by: pl3bscheese
The way I see it, everyone is manipulating their numbers at this point. It seems the reality of our economic recovery is mere stalling out, rather than sinking into financial Armageddon. That's definitely some improvement, but I would like it if people wouldn't freak over the reality, and if the government would be honest with it's people. That's just not reality.

Agreed, you only need to look at the OP link to see the snakey oil, even sub story's on how to cash in. There is no grit in what Shah Gilani says, he just glides over the reduction of fuel as if it meant nothing, yet it meant a lot here and allowed a heap of shinola released just to spend for the simple reason there was not much point in sticking those savings into a charged account with almost zilch returns and ending up just as, or perhaps even more piss poor at the end of the day.
That is the real nub of the of the debate, everybody I have talked to, regardless of their time of life, would rather stick their saved money under the bed, or just spend it, whatever. But not give it to the bankers any more ad hoc because they simply cannot be trusted, they became amoral, probably still are.

Hey Smufy, Banksters haven't just suddenly become amoral, they've always been that way, we've just become more aware of it through ease of communications and The ability to look things up throughout the past via the internet. That's all, they never did clean up their act in the first place. Once A Parasite, Always A Parasite. How it is and always has been. Good Reply, Peace Friend and A Star for you Arjunanda. a reply to: smurfy

a reply to: arjunanda

Paul Craig roberts writes a fair bit on this and it seems that what is going on is that these sorts of economic tricks are being used to make things look a little more rosey than they are. This is so it can be made to seem that there is a reasonable upward trend in the economey over a sufficiently significient period that the US dollar can be held up just a little longer.

Catherine Austin Fitts has good perspectives on this kind of thing too.