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US Q4 GDP Revised Down To 2.4% From 3.2% On Lower Consumer Spending
International Business Times ^ | 02/28/2014 | By Moran Zhang

Posted on 02/28/2014 6:54:05 AM PST by SeekAndFind

The U.S. economy grew at a 2.4 percent annualized rate in the fourth quarter, the Commerce Department said Friday, revising down its initial estimate of a 3.2 percent increase in the nation's economic performance.

The drop in fourth-quarter gross domestic product growth was largely due to a smaller-than-expected boost from Americans buying bit-ticket items such as autos.

Consumer spending, which accounts for 70 percent of the U.S. economy, slowed to a 2.6 percent rise from 3.3 percent in the third quarter. Export, inventory accumulation and government spending also contributed to the downward revision in GDP.

Capital Economics' Paul Ashworth now expects the first-quarter 2014 GDP growth to be close to 2.0 percent. "Once the weather effects begin to unwind in the second quarter, however, we would anticipate a pick-up in GDP growth to nearer 3 percent over the remaining three quarters of this year," Ashworth said in a note.

The U.S. Federal Reserve, which has been trimming the amount of money it is injecting into the economy through monthly bond purchases, views the recent soft patch as a cold weather-related temporary phase. Fed Chair Janet Yellen told lawmakers Thursday that it will take a "significant" change in the outlook for the economy to prompt the central bank to consider pausing or changing the pace of tapering.

(Excerpt) Read more at ibtimes.com ...


TOPICS: Business/Economy; Culture/Society; Front Page News
KEYWORDS: consumer; gdp; spending

1 posted on 02/28/2014 6:54:05 AM PST by SeekAndFind
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To: SeekAndFind

Isn’t that a fairly large difference for a GDP revision?


2 posted on 02/28/2014 6:56:56 AM PST by KoRn (Department of Homeland Security, Certified - "Right Wing Extremist")
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To: SeekAndFind

When is the last time they raised a previous estimate after the period was over?

Hmm?


3 posted on 02/28/2014 6:57:35 AM PST by cicero2k
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To: SeekAndFind
"Once the weather effects begin to unwind in the second quarter, however, we would anticipate a pick-up in GDP growth to nearer 3 percent over the remaining three quarters of this year," Ashworth said in a note.

Yep, that darn weather will get you every time. Sure has been a lot of weather influenced economics since 2008.

4 posted on 02/28/2014 6:58:12 AM PST by Right Brother
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To: KoRn

RE: Isn’t that a fairly large difference for a GDP revision?

Yes, HUGE, HUGE difference. This simply means the economy has been very sluggish throughout 2013.


5 posted on 02/28/2014 6:58:46 AM PST by SeekAndFind
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To: SeekAndFind

They forgot to mention in the headline that this was “unexpected.”


6 posted on 02/28/2014 6:58:52 AM PST by MNGal
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To: SeekAndFind

That’s off the mark by trillions of GDP right?


7 posted on 02/28/2014 7:00:04 AM PST by tellw
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To: Right Brother

Don’t remember the weather being all that terrible in Q4...


8 posted on 02/28/2014 7:00:42 AM PST by MNlurker
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To: SeekAndFind

I heard an interesting factoid yesterday...

People getting tax refunds this year plan to use the money to pay on existing loans or credit card bills.

I found that interesting in that they are NOT doing what they normally do with the ‘extra’ windfall from the government, which is spend it on consumer goods. So the money won’t be having any influence on the economy.

It also seems to me to indicate a real lack of confidence.


9 posted on 02/28/2014 7:01:57 AM PST by EBH ( The Day of the Patriot has arrived.)
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To: KoRn
This is a large revision... however, the original estimate was BS. The article states, " Export, inventory accumulation ... contributed to the downward revision in GDP.

This risk was known in October. Many thought GDP would land at 2% or below for Q4 yet the regime published 3.2%.

10 posted on 02/28/2014 7:06:16 AM PST by 11th Commandment ("THOSE WHO TIRE LOSE")
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To: tellw

RE: That’s off the mark by trillions of GDP right?

Off the top of my head, here’s how I would calculate it roughly ( and economists out there can correct me if I am wrong ).

Let’s say 2012 GDP was $15 Trillion. Forbes tells us that From the fourth quarter of 2012 to the fourth quarter of 2013 real GDP gained 2.5%.

2.5% of $15 trillion is $0.375 trillion or $375 Billion dollars.

So no, it is off the mark by just a few hundred billion dollars. That’s still a huge amount of money. We haven’t been thinking in terms of Billions for the longest time.


11 posted on 02/28/2014 7:08:53 AM PST by SeekAndFind
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To: EBH

Excessive credit card purchasing is creating a false economic illusion. The banking cartels are lining their pockets with 12-18% interest (not to mention the up-front 2-4% merchant fee) while the economic viability of the cash-strapped borrower is diminishing.


12 posted on 02/28/2014 7:19:03 AM PST by Right Brother
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To: 11th Commandment
And correct me if I'm wrong, but 3% is nothing to write home about anyways. And they're guessing we might get that high later this year - after another 2% in first quarter.
13 posted on 02/28/2014 7:22:20 AM PST by mykroar (We fight, get beat, rise, and fight again. - Nathanael Greene)
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To: EBH
OH, but consumer debt is up... haven't you heard the good news from the same people who revised GDP 80 points lower??? (yes sarcasm). The consumer debt is also another false report because the Obama regime now includes student debt.
14 posted on 02/28/2014 7:24:34 AM PST by 11th Commandment ("THOSE WHO TIRE LOSE")
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To: SeekAndFind

By DEFUNDING socialist collectives, you are FUNDING/strengthening your own position/survival.

DEFUND/DISMANTLE

FED up?

IDP - Individual’s Defended Position / FReedom BUMP!


15 posted on 02/28/2014 7:27:00 AM PST by PGalt
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To: mykroar
3% would be a good results IF the recovery had been as historically robust compared to over recoveries- BUT it wasn't- not even close.

In my humble opinion, looking at the data, the only thing helping the economy if fracking. There is really nothing else of new value being added to productivity...

16 posted on 02/28/2014 7:28:09 AM PST by 11th Commandment ("THOSE WHO TIRE LOSE")
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To: SeekAndFind
...revising down its initial estimate of a 3.2 percent increase in the nation's economic performance.

They danced all over the media when that 3.2 was announced. Now you won't hear a peep..................

17 posted on 02/28/2014 7:28:42 AM PST by Red Badger (LIberal is an oxymoron......................)
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To: EBH

I did my taxes last night. My refund?

$5.00..............................

To celebrate, I guess I’ll buy a meal at Hardee’s.............


18 posted on 02/28/2014 7:30:20 AM PST by Red Badger (LIberal is an oxymoron......................)
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To: Right Brother

Don’t forget the economic effect of Easter being early or late.


19 posted on 02/28/2014 7:47:41 AM PST by massgopguy (I owe everything to George Bailey)
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To: massgopguy

And Good Friday falling on a Friday again screwing everything up.


20 posted on 02/28/2014 7:50:12 AM PST by John W (Viva Cristo Rey!)
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To: SeekAndFind

We’re Going Galt on Barry at an accelerating rate.


21 posted on 02/28/2014 7:55:14 AM PST by Buckeye McFrog
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To: massgopguy

Yep. I wonder what influence Punxsutawney Phil might have as well?


22 posted on 02/28/2014 8:04:29 AM PST by Right Brother
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To: John W

LOL-

also- 3.2% to 2.4%— exactly 25% DIFFERENCE

This is a HUGE mistake- done on purpose-

THE MSM?... WILL NEVER cover this


23 posted on 02/28/2014 8:08:16 AM PST by mj1234
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To: SeekAndFind

Yet the stock market is soaring, the S&P closing at new record highs almost every day, etc.

Something is not right with this picture.


24 posted on 02/28/2014 8:12:14 AM PST by Deo volente (God willing, America shall survive this Obamanation.)
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To: FReepers
Take FR Across The Finish Line


Click The Runner To Donate

25 posted on 02/28/2014 8:15:40 AM PST by DJ MacWoW (The Fed Gov is not one ring to rule them all)
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To: mykroar

Especially in light of the accepted 2+% inflation rate.


26 posted on 02/28/2014 8:22:19 AM PST by lepton ("It is useless to attempt to reason a man out of a thing he was never reasoned into"--Jonathan Swift)
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To: Deo volente

Realistically, there is really no place else for the money to go.

This is probably the biggest Ponzi-like scam ever. The market, in parlous times, is a recognzed “greater fool than I” mechanism. But beyond that, how many little guys are partaking of this market in the spectacular manner that many perceive the market is engendering?

The simple fact of the matter is, this bull is being ridden by the market elites. It’s another vehicle for stripping wealth from middle America.

Since there is, fundamentally, nothing (or very little) to support the market’s meteoric rise, when the inevitable correction makes itself felt, these elites will have long since liquidated their positions, leaving it to the “greater fools” to pick up the pieces.

Rest assured, when this happens, many other segments of the economy will be teetering on the brink, so it behooves us all to remain vigilant and know exactly what is going on.

That one more reason (among many) why this board is so important.

CA....


27 posted on 02/28/2014 9:13:07 AM PST by Chances Are (Seems I've found that silly grin again....)
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