Q1 GDP growth revised sharply lower


Treasury prices pop and yields slip after Q1 GDP growth is revised to a gain of just 0.1%. The original estimate had been expansion of well over 2%.

The ADP jobs gain of 220K was ahead of estimates for 210K, and also included upward revisions for March and April totaling 72K jobs, though January was revised lower by 54K, and December lower by 47K. There's additional revisions further back, but what's the point?

The 10-year Treasury yield - higher earlier - is now off by one basis point at 2.69%. TLT +0.1%

ETFs: TBT, TLT, TMV, SHY, IEF, TBF, PST, EDV, TTT, TMF, ZROZ, SBND, TLH, IEI, DLBS, TYO, DTYS, VGLT, BIL, UST, UBT, SHV, VGIT, VGSH, TBX, TLO, SCHO, GSY, TENZ, ITE, DTYL, SCHR, LBND, TYD, TYBS, DTUL, SST, TUZ, DTUS, TBZ, FIVZ, DFVL, DLBL, DFVS, TYNS

From other sites
Comments (35)
  • bbro
    , contributor
    Comments (11237) | Send Message
     
    Year over year ADP job change 2.348 million....year over year Nominal GDP 3.7%
    10 year treasury 2.7% Baa corporate 4.85%
    30 Apr 2014, 08:44 AM Reply Like
  • d.chavo
    , contributor
    Comments (123) | Send Message
     
    Those are all low paying jobs that don't contribute anything to growth. People are just getting by and with higher interest rates coming the economy will start to contract. You must work for Obama always touting the "invisible recovery". Face the facts without QE their is no recovery.
    30 Apr 2014, 09:27 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (9091) | Send Message
     
    d.chavo

     

    Fed's said over and over, they aren't letting rates up until the recovery can support it. ...so there can't be "economic contraction because higher rates squeeze people just getting by."
    30 Apr 2014, 09:36 AM Reply Like
  • CerpherJoe
    , contributor
    Comments (33) | Send Message
     
    A bit deceptive as usual bbro. real GDP growth 2013: 1.9%. yoy from here: even less.
    30 Apr 2014, 09:56 AM Reply Like
  • mobyss
    , contributor
    Comments (2641) | Send Message
     
    Land of Milk -

     

    So you believe that the average tapped out consumer can borrow from the Fed at 0.25%? Consumer debt interest rates are on the rise again (for those that ever went down during the recession), and consumer spending will have to contract to service the more expensive debt. The Fed lends to banks at nearly 0%, nobody else.
    30 Apr 2014, 12:04 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (9091) | Send Message
     
    Mobyss

     

    We're talking percent differences, not a rise back to more normal rates. Fed's keeping it low, does help keep it all low. Movement in a 1-2% range that it's been for a few years... isn't effecting customer spending. Fed said it's waiting for recovery before raising it's rates, which have a trickle effect into everything else. Parsing my comment into worry about whether consumers can borrow from the Fed, gets off the track of the thoughts in the comment....
    30 Apr 2014, 01:07 PM Reply Like
  • Moon Kil Woong
    , contributor
    Comments (13558) | Send Message
     
    Once again the revisions down help prop up the current payrolls up. That's why going back further is useful: to see how many new jobs are just vapor from revising old jobs in the past down.

     

    AS for real growth... pathetic but are we still blaming the cold. Lies make me shiver...brrrr.
    1 May 2014, 12:56 AM Reply Like
  • Matthew Davis
    , contributor
    Comments (4747) | Send Message
     
    Here we go with this guy again. How many stopped looking for work bbro? They offset each other.
    30 Apr 2014, 08:49 AM Reply Like
  • bbro
    , contributor
    Comments (11237) | Send Message
     
    Not really
    30 Apr 2014, 09:01 AM Reply Like
  • Matthew Davis
    , contributor
    Comments (4747) | Send Message
     
    http://1.usa.gov/QZZdz5

     

    Here is proof from your almighty government, look at that unbelievable spike in low wage part time jobs. Wow. Especially since 2008 19% of total employed are part-time, very sad.

     

    600,000 still looking, but the UE number they choose to show us excludes these people.
    30 Apr 2014, 11:29 AM Reply Like
  • bbro
    , contributor
    Comments (11237) | Send Message
     
    Business Cycle Gods are laughing right now....
    30 Apr 2014, 11:36 AM Reply Like
  • Gary Jakacky
    , contributor
    Comments (2968) | Send Message
     
    Whats the POINT? The point is IT MATTERS. Who is writing this article...Hillary Clinton? Hahahahahahaha.
    30 Apr 2014, 08:49 AM Reply Like
  • fred1724
    , contributor
    Comments (67) | Send Message
     
    There'll be more like it as the election nears.
    30 Apr 2014, 11:11 AM Reply Like
  • dacama1
    , contributor
    Comments (221) | Send Message
     
    Too cold and the ice and white stuff that came with it.
    30 Apr 2014, 08:51 AM Reply Like
  • permanent
    , contributor
    Comments (493) | Send Message
     
    All in all pretty bad data. Mortgage applications down, GDP growth sucks, ADP report OK but. Lots to do for Yellen and the FED.
    Is the market going to celebrate?
    30 Apr 2014, 08:59 AM Reply Like
  • fuzzymc
    , contributor
    Comments (198) | Send Message
     
    These are govt. numbers, does the market trade on revisions or when the numbers are first released? Do we really believe govt numbers??
    30 Apr 2014, 08:59 AM Reply Like
  • Lakeaffect
    , contributor
    Comments (1478) | Send Message
     
    They're not govt numbers, those come out on Friday. ADP is a payroll processor. They count the number of paychecks they print and then extrapolate that into a Non-farms payroll prediction.

     

    Sounds good, but it doesn't work, as anyone could see if they simply eyeballed the two series initial ADP and initial NFP for the past couple years. The comment "What's the point?" is likely in recognition of the poor correlation between the two.

     

    It's entertaining to watch folks jump up and down and wave their arms claiming victory when these ADP reports come out. We will see what Friday brings, eh?
    30 Apr 2014, 09:10 AM Reply Like
  • permanent
    , contributor
    Comments (493) | Send Message
     
    These are not govt. numbers these are the numbers from ADP. The BLS numbers are going to be released on Friday.
    30 Apr 2014, 09:10 AM Reply Like
  • fuzzymc
    , contributor
    Comments (198) | Send Message
     
    GDP is not an adp number!
    30 Apr 2014, 09:15 AM Reply Like
  • permanent
    , contributor
    Comments (493) | Send Message
     
    Just look at this graph and you will know where we are. 2008 equals 100, how many more People are living in the US today compared to 2008?
    Total Nonfarm Private Employment by Company Size (in thousands) Tweet this chart - See more at: http://bit.ly/QZwmux
    30 Apr 2014, 09:14 AM Reply Like
  • The Last Boomer
    , contributor
    Comments (1070) | Send Message
     
    Winter was cold, spring is rainy, summer will be hot. All this had, has, and will have negative impact on GDP growth. Only if we could get the perfect weather, GDP would soar. On a more serious note, weather was a somewhat valid explanation for some of the weakness. The real problem is the consecutive decline in residential investment: 5.7% decrease in Q1 2014, and about 7% decrease in Q4 2013. As the New Deal Democrat pinpoints, the decline of the share of residential fixed investment in GDP is often a precursor to a recession 5 quarters out. I really hope that the high frequency indicators of residential fixed investment pick up ASAP.
    30 Apr 2014, 09:20 AM Reply Like
  • mobyss
    , contributor
    Comments (2641) | Send Message
     
    It's never snowed in the Northeast before - 2014 was the first time. That's what they tell me.
    30 Apr 2014, 12:06 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (9091) | Send Message
     
    - mobyss

     

    Apparently you don't live in the NE, SE or Midwest. This year was unusually high in snow and cold. ...it was in the news all winter.
    30 Apr 2014, 01:09 PM Reply Like
  • Matthew Davis
    , contributor
    Comments (4747) | Send Message
     
    When retail sector got hit last quarter, did no one make the connection to a low GDP?
    30 Apr 2014, 01:24 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (9091) | Send Message
     
    M

     

    Huh? Bad weather, low GDP, weak retail. It's been connected together is discussion constantly. Whether or not anyone believes it's a slower economy or merely bad weather... I don't understand your comment that folks haven't been connecting them.
    30 Apr 2014, 01:57 PM Reply Like
  • DrewMcVay
    , contributor
    Comments (1253) | Send Message
     
    We had record snowfall, and there was only one day I didn't go to work and I probably could have. I live in the north east.

     

    I did not buy any less food. I did not make any less repairs on my house/car (I actually did more). I did not spend any less on clothing. I did not spend any less money at all, than I normally do.

     

    It's laughable when you have food companies citing weather as reasons for missing revenue and EPS estimates... I forgot, when it snows people actually don't eat food!!! Totally makes sense.

     

    People aren't buying homes because of the weather, they aren't buying homes because they don't have the money. Period.
    30 Apr 2014, 02:33 PM Reply Like
  • mobyss
    , contributor
    Comments (2641) | Send Message
     
    LoMH - I was joking.
    30 Apr 2014, 02:41 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (9091) | Send Message
     
    Mobyss

     

    Oh, lol.
    30 Apr 2014, 02:45 PM Reply Like
  • Michael Hooper
    , contributor
    Comments (623) | Send Message
     
    I saw this coming in February

     

    http://bit.ly/R2KAKO

     

    Analysts had predicted GDP growth of 1.6% but I wrote that weather would hold that number down. I expect pent-up demand will drive GDP up over 2% in second quarter. A great predictor of this is numbers from the Association of American Railroads. While movement of freight by rail was slowed down by weather in January and February, the latest data show freight movement is picking up substantially. Total combined U.S. weekly rail traffic week ended April 19 was
    549,826 carloads and intermodal units, up 6.3 percent compared with the same week last year.

     

    http://bit.ly/R2KAKU
    30 Apr 2014, 09:37 AM Reply Like
  • mobyss
    , contributor
    Comments (2641) | Send Message
     
    " I expect pent-up demand will drive GDP up over 2% in second quarter"

     

    Pent-up demand for what?
    30 Apr 2014, 12:07 PM Reply Like
  • The Last Boomer
    , contributor
    Comments (1070) | Send Message
     
    Calculated Risk has a great chart of the contribution of different components to GDP. One thing that struck me is that only once in the last 40 years residential investments has had such negative impact on GDP without a recession following in the next year or so. Now, Bill makes one good point: residential investment is still such a low percent of the economy that the two consecutive declines should not be of big concern. I want to believe him; I don't know if I really do though. At this point I see the decline in residential as only one little canary and I'll need to see many more things going bad to believe that recession is imminent. Chicago PMI was great.
    30 Apr 2014, 12:53 PM Reply Like
  • notta lackey
    , contributor
    Comments (131) | Send Message
     
    I want to believe her too, but I have puts on Beazer Homes and they are doing great.
    1 May 2014, 02:09 PM Reply Like
  • DrewMcVay
    , contributor
    Comments (1253) | Send Message
     
    GDP to remain below 1% in the future. The only reason GDP looked good last year was because housing was "booming". Housing is dead currently, and we are in a place of yet again home price depreciation, asset depreciation.

     

    It's laughable people think rates are going up, the economy can't handle higher rates! What makes today different than anytime previous? People don't make a decent wage/have jobs! The unemployment statistic is almost irrelevant, when the culture of the United States is aging and the younger generations (mine) are as lazy as can be.

     

    Stocks will continue to go up, but until housing can grow (it's not), rates will continue to go down and we are currently in a zero interest rate environment. Very likely we will experience a decade-two just like Japan has. Europe is in for the same. The only place interest rates will rise are in TRUE areas of growth, i.e South America/Asia (outside of Japan).

     

    The economy remaining in a standstill is actually really really bullish for the stock market in my opinion. The companies that make money, will make a lot more money; and the companies that don't make any money, will continue to likely not make money (shippers, some tech companies, some energy companies, some industrial companies, some consumer discretionary companies, etc). The ones that make money will continue to issue debt and buy back stock, thus boosting up stock prices, meanwhile paying hefty dividends relative to the past. This is the second best possible scenario for equities that exists outside of a straight line up.

     

    Meanwhile there is reason to be bullish on the bond market also. Until there is a new president elected, or an entirely new political change that happens in Washington, the economy will continue to flounder around. Opportunity is at an ALL TIME LOW among youth. Homeownership 19 YEAR LOW. First time homebuyers ALL TIME LOW. Student debt ALL TIME HIGH. These are continuing trends that ARE NOT good for the economy, and the economy won't turn around until it improves. Credit defaults among consumer credit is at an all time low, and it can't go much lower; therefore it can't improve any further. Washington is to blame. Seeking Alpha would hate me if I elaborated though, as the article would be too long for their servers to handle.
    30 Apr 2014, 02:12 PM Reply Like
  • notta lackey
    , contributor
    Comments (131) | Send Message
     
    The money supply has been increasing at about 7% a year for over a year per Federal Reserve records. So the real growth rate of the economy is -5%. That is consistent with your post, and it will be continuous until the bankocracy is overthrown, hopefully peacefully.
    1 May 2014, 02:14 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (9091) | Send Message
     
    - Drew

     

    Interesting points.

     

    If you'd like, I started an instablog, that's a running conversation between a bunch of SA folks. You'd be welcome to share your thoughts and see what others add or enhance with additional points...
    http://seekingalpha.co...
    Everyone is welcome...
    30 Apr 2014, 02:30 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs