Close X Cookies are necessary for the proper functioning of 24hGold.com. By continuing your navigation on our website, you are accepting the use of cookies.
To learn more about cookies ...
EnglishFrench
Gold & Silver Prices in

New Measures of “Satisfactory”: First Quarter GDP Revised Up to a “Satisfactory” 1.4%

IMG Auteur
Published : June 29th, 2017
663 words - Reading time : 1 - 2 minutes
( 0 vote, 0/5 )
Print article
  Article Comments Comment this article Rating All Articles  
0
Send
0
comment
Our Newsletter...
Category : Opinions and Analysis

In the third and final estimate of first quarter GDP, the BEA upped its assessment of GDP from 1.2% to 1.4%. The Econoday consensus expected no change. Let’s look at the details.

The first-quarter was still weak but does get an upgrade with today’s third estimate, now at a 1.4 percent annualized rate vs 1.2 percent and 0.7 percent in prior estimates. Consumer spending also gets an upgrade, to 1.1 percent from prior estimates of 0.6 percent and 0.3 percent. This had been the weakest consumer showing in 7 years but is now the weakest in 4 years.

Slower inventory growth stripped 1.1 percentage points from the first quarter rate. Looking at final sales, which exclude inventories, growth was very respectable at 2.6 percent. Both residential investment and business investment were the big positives that offset consumer weakness, adding 0.5 points and 1.2 points respectively. Government purchases subtracted 0.2 points as did net exports.

The first quarter turned out satisfactory enough and will take some of the heat off of the second quarter, where a big rebound was the initial expectation which, given continued weakness in consumer spending, has since eased back a bit.

Satisfactory Enough

Apparently, 1.4% is the news measure of satisfactory.

Bond yields are up for the second day, with the 30-year yield at 2.81, having touched 2.84 earlier in the day.

Diving Into the Revisions

Rick Davis at the Consumer Metrics Institue analyzes the the revisions in its Email report.

  • Weak consumer spending grew at a meager +0.75% annualized rate during the quarter, up +0.31 from the previous estimate but still down a significant -1.65% from the prior quarter.
  • The headline contribution from consumer expenditures for goods was still a miniscule +0.11% growth rate (down -1.18% from the prior quarter).
  • The contribution to the headline from consumer spending on services strengthened as it was revised upward +0.27% to +0.64% (although that was down -0.47% from the prior quarter). The entirety of the increase came in upward revisions to the costs of healthcare and insurance (+0.38%). The combined consumer contribution to the headline number was +0.75%, down -1.65% from 4Q-2016.
  • The headline contribution from commercial private fixed investments was revised downward -0.14% to +1.71%, although that remained +1.25% higher than the prior quarter. That growth was primarily in non-residential construction.
  • Inventory contraction deducted -1.11% from the headline number, a downward revision of -0.04% from the previous estimate and down -2.12% from the prior quarter. It is important to remember that the BEA’s inventory numbers are exceptionally noisy (and susceptible to significant distortions/anomalies caused by commodity price or currency swings) while ultimately representing a zero reverting (and long term essentially zero sum) series.
  • Governmental spending was still reported to be contracting, although at a revised lower annual rate (at -0.16%, down -0.19% from the prior quarter).
  • Exports were revised upward +0.13% to a +0.82% contribution to the headline, a +1.37% improvement from the prior quarter.
  • Imports were revised downward (-0.04%), and they subtracted -0.59% from the headline number (up +0.68% from the prior quarter). In aggregate, foreign trade added +0.23% to the headline number after subtracting -1.82% during the prior quarter.
  • The “real final sales of domestic product” grew at an annualized 2.53%, up +0.30% from the previous estimate and up +1.46% from the prior quarter. This is the BEA’s “bottom line” measurement of the economy and it excludes the reported inventory contraction.
  • Real per-capita annual disposable income was essentially unchanged. At the same time the household savings rate was revised downward again by -0.1%. It is important to keep this line item in perspective: real per-capita annual disposable income is up only +7.32% in aggregate since the second quarter of 2008 — a meager annualized +0.81% growth rate over the past 35 quarters.

30-Year Bond

Yield on the long bond is up for the second day, but the monthly trend is pretty clear. The bond market does not think much of this recovery and neither do I.

Mike “Mish” Shedlock

Source : mishtalk.com
Data and Statistics for these countries : Georgia | All
Gold and Silver Prices for these countries : Georgia | All
<< Previous article
Rate : Average note :0 (0 vote)
>> Next article
IMG Auteur
Mish 13 abonnés
Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. He writes a global economics blog which has commentary 5-7 times a week. He also writes for the Daily Reckoning, Whiskey & Gunpowder, and has over 80 magazine and book cover credits. Visit http://www.sitkapacific.com
WebsiteSubscribe to his services
Comment this article
>Follow all commentairies
You must be logged in to comment an article8000 characters max.
Log in or Sign up
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
Latest Comments
Meow
21 JulDoom1
>>For all his blunders and stumbles...<< To be fair, all presidents blunder and stumble like this. This is just the first in a long while ...
The Gold Industry is in a Deep State of Dysfunction, Delusion and D...
21 Julkevthorne
Just hold on to it - you will win. A cautionary tale: I wish, back in the early 90's, when I took out a pension - it was "cast iron, copper...
The Gold Industry is in a Deep State of Dysfunction, Delusion and D...
20 JulDRGEORGE
Yep, hard to argue with any of that. But this poor, disillusioned, confused, swindled, isolated, powerless, 'smart'(HUH) precious metal owner has n...
This Feels Like the Action in 2008 Right Before the Collapse - Dave...
18 JulThe Recusant
Will we witness a battle-royale between the CBs and traders shortly?
Guess What Happens In States Where Food Stamp Recipients Have To Work
18 JulThe Recusant1
As a left-leaning independent, community service seems like a great idea as a prerequisite for food stamps for single childless recipients. But, as...
Watch: Trump Was Hammering CNN In 1990 For Fake News: “When People ...
18 JulThe Recusant
Yes, there is sensationalism in today's news media. On a sliding scale, however, the news media is far more honest than ANYTHING the Trump administ...
Guess What Happens In States Where Food Stamp Recipients Have To Work
18 Julkevthorne2
Then, how about making the banksters do some real, productive work in return for the taxpayer funded bailouts they received - like rebuilding worn-...
Holy Hell
17 Julaccording
good one. where have you been hiding?
Most commented articlesFavoritesMore...
World PM Newsflow
ALL
GOLD
SILVER
PGM & DIAMONDS
OIL & GAS
OTHER METALS