As we noted here on May 29, the Department of Commerce reported that the nation’s economy contracted at an annual rate of about 1 percent during the first quarter of this year. This morning the DoC is out with revised numbers, showing the economy shrank much more than previously thought: 2.9 percent. Last year the White House had predicted 2.6 percent growth for the first quarter. Oops.
The suitably grumpy folks at ZeroHedge put these revised figures into perspective:
Personal consumption expenditures somehow crashed from 3.1% to just 1.0%, far below the 2.4% expected, meaning that all hope of a consumer recovery is dead. Finally, as a reminder, US GDP has never fallen more than 1.5% except during or just before an NBER-defined recession since quarterly GDP records began in 1947. Good luck department of truth propaganda machine, because even assuming 3% growth every other quarter in 2014 means 2014 GDP will be 1.5% at best!
This chart is especially interesting (you’ll want to click to enlarge it to read the tiny key at the bottom); it appears private investment and inventories have plummeted. Inventory shrinkage could be taken as a bullish sign, as companies may now have to rebuild inventories, but it could also mean companies are seeing slack demand.
Speaking of shovel-ready jobs, I think there’s one right now for digging the grave of the Democrats’ Senate majority.