Q4 2012 GDP Revised to a Barely Breathing 0.1%

Q4 2012 real GDP grew by just 0.1% after the second revision.  While technically not in contraction, 4th quarter gross domestic product results imply the economy was officially D.O.A.   Trade imports plunged, which helped economic growth.  Government spending cliff dove and sucked out -1.38 percentage points from 4th quarter real gross domestic product growth as federal defense spending declined 22.0% from Q3.   Private inventory changes hacked off -1.55 percentage points from Q4 real GDP as businesses shed their inventories.  Even without inventories in the economic growth mix,  the economy is still suffering from weak demand.

GDP Contracted -0.1% for Q4 2012!

Q4 2012 real GDP contracted by -0.1%.  Inventory investment nose dived, but was not the lone culprit for economic contraction.    Exports plunged and took -0.81 real GDP percentage points along with it.  Government spending cliff dove and hacked off -1.33 percentage points from 4th quarter gross domestic product as Federal Defense spending declined 22.2% from Q3.

Personal Income Hit By Sandy, Real Consumer Spending Decreases -0.3% for October 2012

The October personal income and outlay's report is not good news. Consumer spending decreased -0.2% from last month, and when adjusted for inflation was a -0.3% decline for October. Consumer spending is another term for personal consumption expenditures or PCE.

Retail Sales Decline -0.3% for October 2012

October 2012 Retail Sales decreased, by -0.3%, Autos & Parts alone dropped -1.5% while auto dealers, part of autos & parts sales, declined by -1.6%. Minus autos & parts, retail sales had no change from last month. September's monthly percentage change was revised upward, from 1.1% to 1.3%. Retail sales are reported by dollars, not by volume, so dropping prices often reports as a decline in sales.

Consumer Spending Increased 0.8%, Real Personal Income Minus Government Payments Decreased -0.1% for September 2012

Americans spent more than they earned. That's what's implied in the BEA's September personal income and outlay's report. Consumer spending increased 0.8% from last month, and when adjusted for inflation was a 0.4% increase for September. Consumer spending is another term for personal consumption expenditures or PCE.

Real Consumer Spending Up 0.1%, Real Dispoable Income Down -0.3% for August 2012

Consumer spending increased 0.5% from last month, yet when adjusted for inflation was only a 0.1% increase for August. Consumer spending is a name coined by the press and means personal consumption expenditures or PCE. Real personal consumption expenditures are hugely important to economic growth as consumer spending is about 71% of GDP.


Bad News for Economic Growth as Q2 2012 GDP is Revised Down to 1.25%

Q2 2012 real GDP now shows 1.25% annualized growth after revisions. The advance second quarter GDP estimate was 1.5%, whereas the second revision reported 1.7% GDP growth. The BEA rounds their final GDP numbers, so the actual GDP reported was 1.3%. When we're grabbing economic crumbs, 0.05 percentage points makes a difference.



What the Q2 GDP third estimate shows is a barely breathing economy. Businesses shed inventories, consumers spent way less, a dramatic swing from the Q2 GDP advance report and investment generally is down from the 1st quarter. Shedding inventories can be a recession indicator. Durable goods spending literally vanished in Q2, also a recession indicator. The drought showed up in Q2 GDP, negatively impacting farm inventories and potentially other GDP components indirectly.

Consumer Spending Up 0.4%, Personal Income 0.3% for July 2012

Consumer spending increased 0.4% from last month, in actual dollars and also when adjusted for inflation. Personal consumption expenditures are often called consumer spending by the press. Real Personal Consumption Expenditures, or PCE, are about 71% of GDP. Graphed below is the monthly change in consumer spending.