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GDP contracted 2.9%

  • GDP Q1: -2.9% vs. -1.8% expected, -1.0% previous.
Comments (51)
  • june1234
    , contributor
    Comments (2499) | Send Message
     
    Oops. weather, weather, weather. Thats a lot of ground to make up rest of the yr
    25 Jun, 08:41 AM Reply Like
  • bbro
    , contributor
    Comments (9319) | Send Message
     
    Sell everything...run for the hills...high tail it outta here...etc etc etc...
    25 Jun, 08:43 AM Reply Like
  • MEKhoury
    , contributor
    Comments (194) | Send Message
     
    Not sure if sarcastic or actually turned
    25 Jun, 08:47 AM Reply Like
  • bbro
    , contributor
    Comments (9319) | Send Message
     
    See comment below....
    25 Jun, 08:55 AM Reply Like
  • fbrock
    , contributor
    Comments (8) | Send Message
     
    I was being sarcastic.
    25 Jun, 08:59 AM Reply Like
  • bbro
    , contributor
    Comments (9319) | Send Message
     
    Back at ya big fella...
    25 Jun, 09:02 AM Reply Like
  • fbrock
    , contributor
    Comments (8) | Send Message
     
    No recession in sight!
    25 Jun, 08:44 AM Reply Like
  • GaltMachine
    , contributor
    Comments (1135) | Send Message
     
    Holy crap! All I can say is wow.

     

    Does it really need two quarters of negative growth to qualify as a recession when the drop is this big?
    25 Jun, 08:44 AM Reply Like
  • TAS
    , contributor
    Comments (1983) | Send Message
     
    Can one imagine the reaction if a Republican President was in office?
    25 Jun, 10:22 AM Reply Like
  • bbro
    , contributor
    Comments (9319) | Send Message
     
    This is not a recession...look at payroll employment growth,look at the direction of jobless claims,look at the direction of housing starts.look at credit spreads,look at the yoy change in Postponable Purchases to GDP etc etc etc
    25 Jun, 08:51 AM Reply Like
  • GaltMachine
    , contributor
    Comments (1135) | Send Message
     
    bbro,

     

    Come-on, even you have to admit this is a horrible number. There was exactly zero economists predicting this entering the year so what it proves is that consensus thinking is generally wrong - a very valuable lesson.

     

    That doesn't mean that the consensus that markets will collapse in a recession isn't wrong either which is why we should separate discussions of stocks from discussions of the economy.

     

    "PCE growth was revised down from 3.1% to 1.0%"
    Read more at http://bit.ly/1iFm13z
    25 Jun, 08:56 AM Reply Like
  • bbro
    , contributor
    Comments (9319) | Send Message
     
    I am saying ( like you have mentioned many times) these numbers are subject to serious revision...you need to look elsewhere to find numbers
    that provide satisfactory predictiveness...
    25 Jun, 09:04 AM Reply Like
  • mrdirt
    , contributor
    Comments (415) | Send Message
     
    Payroll numbers may look good, but most of the jobs added were in the low paying sectors still many college grads going back 5 yrs are either unemployed or underemployed. Jobless Claims, who is left to layoff?.
    25 Jun, 09:15 AM Reply Like
  • Papaswamp
    , contributor
    Comments (2178) | Send Message
     
    Participation rate 25-54 vs weekly claims (interesting new dynamic):
    http://bit.ly/1iFrKXe

     

    Housing starts:
    http://bit.ly/1iFrLKB

     

    Corporate and Govt debt (as percentage of GDP):
    http://bit.ly/1iFrNSE

     

    The economy is a farce. Its the product of forced low interest rates, hot money and debt expansion.

     

    70% of wage earners make less than $50k a year. 50% less than $28k.
    http://1.usa.gov/1kPa6Qx

     

    Now imagine a .5% increase in interest rates....
    25 Jun, 09:17 AM Reply Like
  • bbro
    , contributor
    Comments (9319) | Send Message
     
    Quits levels...oh never mind...please go ahead think we are going into a recession....
    25 Jun, 09:21 AM Reply Like
  • Papaswamp
    , contributor
    Comments (2178) | Send Message
     
    Quits levels show what? Job quality? Age of participants? Wonder what is driving quits lower?
    http://bit.ly/I8JC4K

     

    Perhaps its retirees forgetting to retire?
    25 Jun, 09:31 AM Reply Like
  • bbro
    , contributor
    Comments (9319) | Send Message
     
    "Wonder what is driving quits lower?"

     

    Other way around....
    25 Jun, 09:36 AM Reply Like
  • Brendan O'Boyle
    , contributor
    Comments (1035) | Send Message
     
    Um, look at the headline number?

     

    A recession is simply defined as two consecutive negative GDP prints...
    25 Jun, 09:39 AM Reply Like
  • XactGuess
    , contributor
    Comments (28) | Send Message
     
    You mention direction of jobless claims. How about the long term trend? Particulary the particpation rate of those 30 and under? You are looking at short term period over period trends and not the long term picture. How many of those supposed rise in payroll jobs are FULL-TIME? Are they advanced jobs or dishwashers? (http://bit.ly/1ryaDqo)

     

    Housing starts is just annual pent up demand dealing with new households and pop growth. Are you look at a chart that goes back to the 1960's? Not a pretty picture....much like global warming you are looking at recent and short term charts that fit your argument. (http://bit.ly/1ryaFys)

     

    Credit spreads? Who the hell cares about credit spreads when the young in this country are running out of jobs, not buying homes and still living with their parents. I understand that some use these credit spreads to predict GDP growth, but it one indicator. I've seen many measures and supposed decades old predicitive metrics fall by the wayside and furthermore, no one indicator can predict exactly what will happen in this economy. Particulary when there has been so much meddling and tinkering with the fundamentals and markets. All the credit in the world won't get Johnny and Jill a job and out of their parents' home and/or off the taxpayers dime. It also won't cause me to take more risk when it comes to my business. You really think I'm going to hire more people with Odumacare looming or take more risk given the ever increasing margin pressure due to govt regulation and theft?

     

    If we continue towards this tinkering and destruction of a FREE economy.....no amount of number massaging will hide what happens. Just look at the 2008 crisis, caused by our dear big federal govt meddling with business they don't fully understand. How many actually saw it coming? Everything was just peachy until it wasn't.

     

    Postponted purchases? This is almost laughable. I've postponed many of purchase for myself and my business. Why? This economy and the people screwing it up! As I mentioned above, I don't see that changing anytime soon or me taking any additional risk. Like much that comes from our govt...all these mterics are nothing more than believable lies....at least for those ignorant enough to believe them.
    25 Jun, 09:48 AM Reply Like
  • Papaswamp
    , contributor
    Comments (2178) | Send Message
     
    You are correct, they are rising....though series wise still low.
    http://bit.ly/1rycOKx
    Of course the assumption is rising quits means there are better jobs (higher pay) to migrate to as opposed to the possibility that jobs are so poor that one is merely trying to find something that isn't quite as miserable as the last. Considering the wage stagnation (especially recently) it seems more just job hopping than finding higher pay.
    25 Jun, 09:57 AM Reply Like
  • bbro
    , contributor
    Comments (9319) | Send Message
     
    "Who the hell cares about credit spreads"

     

    "all these mterics are nothing more than believable lies....at least for those ignorant enough to believe them."

     

    Cogent....
    25 Jun, 10:06 AM Reply Like
  • permanent
    , contributor
    Comments (115) | Send Message
     
    Two negative quarters back to back for recession is just the official Definition.

     

    fbrocks comment : No recession in sight is just the perfect reply to bbro constant repeating of these words.
    Well done!!!

     

    Sure weather had a great impact but with a number this bad there has to be more wrong than just the weather.
    25 Jun, 08:53 AM Reply Like
  • th3decider
    , contributor
    Comments (277) | Send Message
     
    If I recall, bad weather happens every year around q1....
    25 Jun, 09:38 AM Reply Like
  • Rope a Dope
    , contributor
    Comments (531) | Send Message
     
    Let's not forget these numbers are using the new BEA accounting measures implemented in July 2013 that were expected to add (yes add!!) to the GDP numbers.
    25 Jun, 08:59 AM Reply Like
  • Robert Duval
    , contributor
    Comments (2927) | Send Message
     
    Its a great number as ensures QE will remain in place longer. Who actually cares about the real economy -- print baby print!
    25 Jun, 08:59 AM Reply Like
  • bbro
    , contributor
    Comments (9319) | Send Message
     
    Perm....so a recession has started? or you one of those people who says it never ended...in that case...good luck...
    25 Jun, 08:59 AM Reply Like
  • Rope a Dope
    , contributor
    Comments (531) | Send Message
     
    It never ended for many people on Main Street. Wall Street has been flying high but let's be realistic about who will eventually lead the parade.
    25 Jun, 09:06 AM Reply Like
  • dnorm1234
    , contributor
    Comments (828) | Send Message
     
    >It never ended

     

    So, by what metric will you consider it ended, just so I know? Or are you more of a touchy-feely, "it ends when I say it ends" guy?
    25 Jun, 09:26 AM Reply Like
  • Rope a Dope
    , contributor
    Comments (531) | Send Message
     
    I’ll assume that was directed at me and if so, I personally only caught a brief glimpse of the recession. I’ve been flying high for the last few years largely as a result of the massive amounts of liquidity being pumped into the market. You could essentially say for me, the recession never really even started. But … I have never lost sight of what drives the US economy forward and it sure as hell isn’t Wall Street or investors like me.

     

    Main Street drives the US economy and the recession is over when THEY say it’s over, not me.
    25 Jun, 09:50 AM Reply Like
  • idkmybffjill
    , contributor
    Comments (1555) | Send Message
     
    This 2.9% is on an annualized basis, correct? Not a full 2.9% contraction in Q12014.
    25 Jun, 09:03 AM Reply Like
  • permanent
    , contributor
    Comments (115) | Send Message
     
    bbro, no I just gave the official Definition of what a recession is and yes I think we may be heading toward a recession if we are not in one yet.
    The growth rates of the past years was bought with government debt at an unfortunate bad return rate.
    25 Jun, 09:07 AM Reply Like
  • The Last Boomer
    , contributor
    Comments (880) | Send Message
     
    I don't like the weather excuse because we will have more and more instances of extreme weather that will impact the economy. Weather should not be considered anymore as a "one-time event". Accelerating climate change and extreme weather should become an integral part of economic and investment forecasting. Most likely the way it is going to impact the forecasting is to increase the uncertainty. The error term, the "noise" in the forecasting models should become more salient which will make the forecasts less reliable.
    25 Jun, 09:08 AM Reply Like
  • Rope a Dope
    , contributor
    Comments (531) | Send Message
     
    Thanks, but I don't watch MSLSD.

     

    Let's not forget the same people telling us how great the economy is are the same ones peddling Climate Change or whatever it is being called these days.
    25 Jun, 09:15 AM Reply Like
  • bbro
    , contributor
    Comments (9319) | Send Message
     
    Perm...The recession started in January 2014 right?...well we will see....guess you a loading up on bonds and gold...
    25 Jun, 09:14 AM Reply Like
  • Guardian3981
    , contributor
    Comments (1926) | Send Message
     
    Raise the min wage to 15$ that will fix everything!
    25 Jun, 09:16 AM Reply Like
  • pjtec
    , contributor
    Comments (3) | Send Message
     
    Thanks for nothing, useless GOP! Your sabotage is working well, given you've created more phony scandals and government shutdowns than actual jobs as legislators! :-(
    25 Jun, 09:22 AM Reply Like
  • Rope a Dope
    , contributor
    Comments (531) | Send Message
     
    It is unfortunate that people like you are permitted to vote. You are completely out of touch with reality.
    25 Jun, 10:01 AM Reply Like
  • EK1949
    , contributor
    Comments (1480) | Send Message
     
    "It never ended for many people on Main Street."

     

    Neither did the GD end for many people. They ended first. Still, the GD ended.

     

    I think it's important not to change the subject from whether we're in a recession to whether some people never got out of the last one. The answer to one is no and the other is yes, and that's not contradictory.

     

    There's a reason why recessions are defined as two consecutive quarters of negative growth. It removes false positives like Q1 (if it is a false positive), and if we get a negative Q2 number then by golly even bbro and I will agree we're in a recession. That's not as unlikely as some optimists think, given low spending at all government levels and the wave of tax increases at the beginning of the year.

     

    This BEA chart is informative. Read across line 1 from 2010 to now, then go down to line 23 and compare the numbers with line 1.

     

    http://read.bi/1iFuP9x
    25 Jun, 09:27 AM Reply Like
  • Papaswamp
    , contributor
    Comments (2178) | Send Message
     
    I think the concern of many..myself included, is the massive government and Fed intervention that is still taking place. Continued forced low interest rates coupled with continued debt creation isn't the sign of a healthy economy.
    http://bit.ly/1iFrNSE

     

    Since the US is consumer based a more rapid rise in wages would seem a better indicator, instead wage are stagnant at best and lately in a bit of decline Y/Y. A recent pop in inflation (hopefully a fluke) wont help a consumer stuck with low wages.
    Cracks are beginning to show.
    http://on.mktw.net/1ry...

     

    US in top 10 OECD countries with families struggling to afford food.
    http://bit.ly/1ryahjm
    25 Jun, 09:45 AM Reply Like
  • HAPPYCAPITALIST
    , contributor
    Comments (316) | Send Message
     
    bbro,

     

    So I take it you're extremely pleased with these numbers and will continue to buy stocks hand over fist because they're so cheap ?
    25 Jun, 09:35 AM Reply Like
  • bbro
    , contributor
    Comments (9319) | Send Message
     
    Happy...so I take it you regard these numbers as definitive and you would sell stocks hand over fist?
    25 Jun, 09:42 AM Reply Like
  • Bouchart
    , contributor
    Comments (755) | Send Message
     
    Maybe we should include drug dealing, prostitution, and organized crime to the GDP number to get it positive again.
    25 Jun, 09:46 AM Reply Like
  • freedom_has_few_friends
    , contributor
    Comments (33) | Send Message
     
    Can you say Obamacare?
    25 Jun, 09:55 AM Reply Like
  • Rope a Dope
    , contributor
    Comments (531) | Send Message
     
    Not without throwing up.
    25 Jun, 11:20 AM Reply Like
  • Tricky
    , contributor
    Comments (1583) | Send Message
     
    Actually, deeper analysis seems to indicate that one of the biggest drivers in the number is a huge DECREASE in healthcare spending.

     

    But, to me, that just adds to the mystery of this number. That big a fall isn't just recession, it's a depression like number. While I'm under no illusions that "everything is awesome" there isn't much corroborating evidence of falling sky.

     

    Very bizarre. I am inclined to wait on other evidence.
    26 Jun, 08:45 AM Reply Like
  • Petrarch
    , contributor
    Comments (633) | Send Message
     
    If you believe you are in a recession with
    negative real fed funds,
    jobless claims where they are and
    17 million of domestic car sales and
    rising corporate earnings
    etc. etc,

     

    Be my guest.

     

    I feel sorry for you but then somebody needs to be on the other side of my trades.

     

    P
    25 Jun, 10:16 AM Reply Like
  • HAPPYCAPITALIST
    , contributor
    Comments (316) | Send Message
     
    bbro,
    you chose an extreme, so I chose an extreme. Under more normal conditions (i.e No Fed interference & gov't cheerleading to show growth that's not there), one might think about shorting this market. Since it LOOKS (can't tell any more with this environment) like The Fed's hands will become more tied as this continues, the inflated P/E of most stocks (assisted by a lot of share buybacks, not increased revenues) is not justified. Running for the hills ? No. Checking out the gps to see where the hills are ? Yeah
    25 Jun, 10:19 AM Reply Like
  • permanent
    , contributor
    Comments (115) | Send Message
     
    bbro, no I am not big on metals so I am not buying Gold. I am thinking of buying Longs on the NYSE Arca Gold Bugs for a short term speculation and I am not holding any bonds.
    25 Jun, 10:45 AM Reply Like
  • jstratt
    , contributor
    Comments (2209) | Send Message
     
    I think your datapoint for GDP should be that this news came out to the big movers yesterday at 11:05 am EST. Why else would a market that is historic for its lack of volatility drop 150 pts the rest of the day.

     

    GDP is plugged into most of the computerized market models and my contention is that is got plugged into them yesterday before the news came out today that GDP was down -2.9%.
    25 Jun, 11:53 AM Reply Like
  • Padawan learner
    , contributor
    Comments (60) | Send Message
     
    I’m not the expert so take what I say with a grain of salt, but the economy isn’t the stock market (their trajectories can be very different).

     

    Zimbabwe’s stock market rocketed with their hyperinflation while the average Joe in Zimbabwe was doing far worse by the day. IMO QE and low interest rates could keep the stock market running while Joe America slides down.

     

    Keynesians, Monetarists and Austrians in Economics, politically Democrats and Republicans will disagree on how to make the true economy better, but it would not surprise me at all if an economy and stock market disconnect is what we have been seeing and that it accelerates.
    25 Jun, 12:59 PM Reply Like
  • Ricardo Espinosa
    , contributor
    Comments (451) | Send Message
     
    Hold your horses, this is the FIRST quarter of declining GDP (annualized). So no recession yet, unless the release on July 30th for Q2 2014 is also negative.

     

    Q4 2013 GDP was +2.6%, Q1 2014's GDP was first estimated at -1%, then re-stated to -2.9% because "the increase in personal consumption
    expenditures (PCE) was smaller than previously estimated, and the decline in exports was larger than previously estimated"...

     

    Link: http://1.usa.gov/vgZr0y
    25 Jun, 02:29 PM Reply Like
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