Final Q3 GDP Misses As Personal Consumption Drops BigAnd so the year ends not with a bang but with an economic whimper, as the final Q3 GDP is revised lower from 2.0% to 1.8% on expectations of an unchanged print. The reason: Personal Consumption contributed only 1.24% instead of the 1.63% in the second revision and 1.72% in the advance forecast. No bias there at all. But sure enough, here comes the inventory kicker, which subtracted just 1.35% instead of the 1.55% seen previously. What this means is that the inventory kick which was expected to come in Q4 2011 was pushed forward to prevent a 20% collapse in GDP today as keeping inventory change fixed would have resulted in a 1.6% Q3 final GDP. Net net - very weak report and one which portends weakness from Q3 is spilling over in Q4, where in addition to everything we will soon see the NAR existing home sale adjustment hit the economy with a double whammy of historical adjustments.
In other news, the BLS reports that US businesses have increasingly less temporary workers left to fire, as Initial Claims came at another 3 year low of 364K down from an upward revised 368K, and well "better" than expectations of 380K, which only means that employers are only borrowing termination time from the future as the economy is finally starting to decouple with reality. Just as amusing, the BLS has completed 2011 with a perfect track record of prior upward revisions in continuing claims, this time the previous number being raised from 3,603M to 3,625M with the current one largely irrelevant. Finally, the 99-week cliff once again creeps up as 136K people drop off extended claims and EUC benefits. Merry Christmas - the economy is improving and what not.
http://www.zerohedge.com/news/final-q3-gdp-misses-personal-consumption-drops-bigPresident Downgrade FoodstampsForAll should stop worrying about making the oceans recede and worry about fixing this economy.....after his $4 million, 17-day vacation, of course.
