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GDP

Rather than listen to the shills and knuckleheads on CNBC, I prefer to go directly to the data when an important government generated data point is announced. The GDP increased by 3.2% in the 1st quarter. The recovery believers are happy. Let’s dig into the numbers. The GDP is $14.6 trillion. Last year when the system was collapsing it was $14.2 trillion. So, we are up $400 billion from the depths of disaster. The $400 billion increase was generated by:

  • $80 billion more Federal government spending ($55 billion for National Defense – preparing for Iranian attack)
  • $150 billion from companies restocking their inventories
  • $380 billion of increased consumer spending (Cash for clunkers, tax credits, delusional Americans)
  • -$88 billion from less construction of buildings and houses
  • -$125 billion from importing more than exporting stuff

 The trend that I see is that the growth from the previous quarter is petering out. With the dollar strengthening, exports will start to decline. Commercial & residential construction will not be increasing. Inventory restocking is done. So, it comes down to the consumer. The savings rate is back down to 3%. Will the American consumer be foolish and stupid enough to buy more shit with debt? Anything is possible, but I wouldn’t count on it. Gasoline and food prices are soaring. Taxes are going up across the board. I see a double dip recession beginning in the 3rd quarter. 

 

Line      2009   
I
   2009   
II
   2009   
III
   2009   
IV
   2010   
I
1       Gross domestic product 14,178.0 14,151.2 14,242.1 14,453.8 14,601.4
2 Personal consumption expenditures 9,987.7 9,999.3 10,132.9 10,236.4 10,367.1
3    Goods 3,197.7 3,193.8 3,292.3 3,337.1 3,404.1
4       Durable goods 1,025.2 1,011.5 1,051.3 1,052.0 1,070.6
5       Nondurable goods 2,172.4 2,182.2 2,241.0 2,285.1 2,333.5
6    Services 6,790.0 6,805.6 6,840.6 6,899.3 6,963.0
7 Gross private domestic investment 1,689.9 1,561.5 1,556.1 1,707.8 1,762.9
8    Fixed investment 1,817.2 1,737.7 1,712.6 1,731.4 1,729.7
9       Nonresidential 1,442.6 1,391.8 1,353.9 1,366.9 1,374.4
10          Structures 533.1 494.8 457.9 434.1 418.9
11          Equipment and software 909.5 897.0 895.9 932.8 955.5
12       Residential 374.6 345.9 358.8 364.5 355.3
13    Change in private inventories -127.4 -176.2 -156.5 -23.6 33.2
14 Net exports of goods and services -378.5 -339.1 -402.2 -449.5 -503.8
15    Exports 1,509.3 1,493.7 1,573.8 1,680.1 1,719.5
16       Goods 989.5 978.1 1,045.2 1,140.6 1,171.2
17       Services 519.8 515.6 528.5 539.6 548.3
18    Imports 1,887.9 1,832.8 1,976.0 2,129.7 2,223.3
19       Goods 1,508.2 1,461.1 1,592.8 1,739.4 1,822.7
20       Services 379.6 371.7 383.1 390.3 400.6
21 Government consumption expenditures
    and gross investment
2,879.0 2,929.4 2,955.4 2,959.2 2,975.2
22    Federal 1,106.7 1,138.3 1,164.3 1,170.1 1,186.3
23       National defense 750.7 776.2 795.8 793.5 805.6
24       Nondefense 356.0 362.1 368.5 376.7 380.7
25    State and local 1,772.3 1,791.2 1,791.1 1,789.0 1,788.9