As a reminder, GDP is made up of:
Y=GDP, C=Consumption, I=Investment, G=Government Spending, (X-M)=Net Exports, X=Exports, M=Imports.
So, what changed? Here are the 3rd estimate numbers:
- C = 1.6%
- I = 46.1%
- G = -1.3%
- X = 22.8%
- M = 15.8%
In the first revision, those numbers were:
- C = 1.7%
- I = 48.9%
- G = -1.2%
- X = 22.4%
- M = 15.3%
So, as we can see the C, or consumption (PCE), which reflects demand, was down slightly in this revision, but the main change was in investments again. Investment also was down, which also reflects less demand. Note that changes in inventories accounted for 3.79 of the total 5.6% GDP growth. So, only 1.8% of the total GDP growth was due to other factors beyond changes in inventories.
The price index was also changed from 1.9% to 2.0%. (paid more means bought less in quantity).
On I we see the change in non-residential structures from -13.9 to now -18.0. Residential "I" (investment) dropped from 5.0 to 3.8. Both of these reflect the state of commercial real estate and residential.
Read a jaw dropping paragraph from the report:
Domestic profits of financial corporations increased $65.0 billion in the fourth quarter, compared with an increase of $82.8 billion in the third. Domestic profits of nonfinancial corporations increased $59.8 billion, compared with an increase of $27.6 billion.
In the fourth quarter, real gross value added of nonfinancial corporations increased, and profits per unit of real product increased. The increase in unit profits reflected decreases in both unit labor costs and unit nonlabor costs that more than offset a decrease in unit prices.
Ok, now what does that say? It says the Banksters, fueled with cheap Fed. zero interest loans and taxpayer funds, made more money than the producers of the real economy (ya know the people who make stuff). It also says profits by those who make stuff were done by screwing over their employees and firing them, plus reducing other costs. In other words, their profits didn't come from the good old fashioned practice of selling more of the stuff they made.