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When it comes to the U.S. economy, the glass just went from half full to half empty. At the start of the year, economists were optimistic. Perhaps the economy would grow 3% this year, they said, instead of the measly 2% pace it's been stuck at for the prior three years. So much for that hopeful thinking. Half-way through the year, forecasts are being slashed. The latest Zorro move comes from the International Monetary Fund. The organization said Monday that the U.S. economy would only grow 2% this year, down from it earlier forecast of 2.8%. This comes on the...

Economists, investment analysts, and politicians have spent much of 2014 bemoaning the terrible economic effects of the winter of 2014. The cold and snow have been continuously blamed for the lackluster job market, disappointing retail sales, tepid business investment and, most notably, much slower than expected GDP growth. Given how optimistic many of these forecasters had been in the waning months of 2013, when the stock market was surging into record territory and the Fed had finally declared that the economy had outgrown the need for continued Quantitative Easing, the weather was an absolutely vital alibi. If not for the...

Remember when the "thesis" for Q2 growth was that just because Q1 was so horrible, Q2 will have to bounce back? Well, oops. Following the horrendous ADP data, the abysmal April trade numbers, and the disastrous Q1 productivity collapse (which certainly should make the Fed reassess their baseline estimate for 2.8% GDP growth), the penguin parade in which sellside "analysts" rush to show just how clueless they really are, has begun, first with Bank of America which cut its Q2 GDP forecast by 0.5% to 3.6%, then Credit Suisse lowering its Q2 forecast by 1 whopping percentage point to...

As Thursday’s revised gross domestic product number suggests, Main Street knows much more than the Beltway economists about how bad a shape the US is in. Despite the S&P 500 Index hitting all-time highs almost daily, Americans are voting with their feet. The eggheads in Washington, from Treasury to the Fed, were all projecting strong growth for the first quarter of 2014 — even after the first read came out saying the “growth” was 0.025 percent, or an annualized 0.1 percent, for the quarter. And then Thursday’s first revision showed an annualized loss of 1 percent. Frequently, your local diner...

Just when you thought that Italy’s crazy government couldn’t get any more insane, it hit on a gimmick for improving the international perception of its economy. Just include the black market in its GDP. Never mind that the black market isn’t taxable, difficult to estimate and not exactly a good thing. Italy is changing how it calculates its gross domestic product, a measurement of the overall economy, to include black market activity — everything from prostitution to illegal drug sales to smuggling and arms trafficking. Economists predict illegal sales will add 1.3 percentage points to GDP this year.Hey, it’s one...

May 30, 2014 - 10:21 AM John_Rubino As expected, the US revised the most recent quarter’s GDP from barely positive to sharply negative today. But once again the true extent of the problem was hidden by some statistical sleight of hand, in this case wildly-optimistic inflation assumptions. Here’s an excerpt from the Consumer Metrics Institute’s just-published analysis: May 29, 2014 – BEA Revises 1st Quarter 2014 GDP Sharply Downward to Outright Contraction at Nearly a 1% Annual Rate: In their second estimate of the US GDP for the first quarter of 2014, the Bureau of Economic Analysis (BEA) reported that...

U.S. stocks rose at the open on Thursday on expectations of strong growth in the second quarter, even as data showed the world's largest economy contracted in the first quarter. Supporting the push to a fresh record high on the S&P 500, the number of Americans filing new claims for unemployment benefits fell more than expected last week, pointing to a strengthening labor market. "Personal consumption was actually revised up, it was a big number and it held," said Phil Orlando, chief equity market strategist at Federated Investors in New York, speaking of the internals of the GDP data. "This...

Istat, Italy’s national statistics office, will include estimated dealings from drugs, arms trafficking and prostitution in its GDP figures from now on. […] This move should increase Italy’s economy by at least 1.3 percent in the first year, helping it to comply with EU rules on indebtedness, which limit member countries to spending no more than 3 percent of their GDP. […] Eurostat, the EU’s stats body, says if all illegal activity is included in GDP figures, European economies would have a growth rate closer to 2.4 percent. The agency says the UK’s GDP figure could be three or four...

A year ago it was the US which first "boosted" America's GDP by $500 billion - literally out of thin air - when it arbitrarily decided to include "intangibles" to the components that 'make up' GDP (in the process cutting over 5% from the US Debt/GDP ratio). Then Spain joined the fray. Then Greece. Then the UK. Then Nigeria, which showed those deveoped Keynesian basket cases how it is really done, when it doubled the size of its GDP overnight when it decided to change the base year of its GDP calculations. Now it is Italy's turn, and like everything...

<p>A couple weeks ago, the Commerce Department said U.S. economic output expanded at a seasonally adjusted annual rate of 0.1% in the first three months of the year. A near-stall for the economy, for sure, but at least it wasn’t worse.</p>

The cold and wet winter set the U.S. economy back, but it didn’t knock it off the rails, according to Ted Wieseman, an economist for Morgan Stanley and the winner of the April Forecaster of the Month award from MarketWatch. The slow start to the year, with gross domestic product likely contracting in the first quarter, means growth in 2014 won’t hit the 3% pace that Wieseman and many other economists had expected. In fact, the economy may grow less in 2014 than the 2.6% growth posted in 2013.

As the POR (Pelosi-Obama-Reid) economy [1] nears the end of its sixth year, one thing we can say for certain is that the “fundamental transformation” President Barack Obama, Senator Harry Reid, Congresswoman Nancy Pelosi and their party have long wished to impose on these United States has made measurable progress.Democratic Party housing policies caused the recession [2]. Obama’s conduct during the 2008 campaign [3] and the presidential transition period [4] lengthened it. His administration’s failed [5] 2009 stimulus plan, followed by over five years of cronyism [6], demagoguery, and regulatory zealotry — now briskly advancing into bald intimidation [7]...

Also, keep in mind that as we explained before, Q1 GDP was boosted around 1% by the forced spending "benefit" of Obamacare: a GDP contribution that will no longer be there. Which means that either normalized Q1 GDP is approaching -2%, or Q2 GDP is about to be whacked by the same amount. Pick your poison. One thing is certain - anyone hoping that 2014 is the year in which the US economy finally achieved "escape velocity" will have to drink the humiliation under the table as they repeat the mantra of apologists everywhere: "snow.... snow.... snow...."

Which nation is richer, Belarus or Luxembourg? If you look at total economic output, you might be tempted to say Belarus. The GDP of Belarus, after all, is almost $72 billion while Luxembourg’s GDP is less than $60 billion. But that would be a preposterous answer since there are about 9.5 million people in Belarus compared to only about 540,000 folks in Luxembourg. It should be obvious that what matters is per-capita GDP, and the residents of Luxembourg unambiguously enjoy far higher living standards than their cousins in Belarus. This seems like an elementary point, but it has to be...

By: Larry Walker, Jr.Back on January 14, 2014, POTUS 44 announced, “We’re not just going to be waiting for legislation in order to make sure that we’re providing Americans the kind of help they need. I’ve got a pen and I’ve got a phone.” Well, great!Then on April 30, 2014, the Bureau of Economic Analysis (BEA) announced that real gross domestic product (GDP) had increased at an annual rate of just 0.1 percent in the first quarter (that is, from the fourth quarter of 2013 to the first quarter of 2014). Well, so much for going it alone. Please stop...

According to a World Bank report released Wednesday, the United States is on the cusp of losing its economic global supremacy for the first time since it took the crown from the United Kingdom in 1872. But after their last report in 2005 found that China’s economy was only 43% as large as the U.S., criticism forced the World Bank to politically correct their statistical data. The new World Bank analysis magically revealed that China’s economy had grown to 87% of the size of the U.S. by 2011 and will be larger than the U.S. this year. American’s should ignore today’s...

Everyone's Q1 GDP Estimates Turn Negative Rob WileMay 1. 2014  Yesterday, the BEA announced Q1 GDP climbed just 0.1%. This afternoon, Wall Street is saying it's even worse. Citing weak construction spending data, several firms' GDP tracking models now show Q1 growth fell into negative territory. "Residential construction was a bright spot, rising 0.7% on the month and standing 15.2% above year-ago levels," noted Barclays' Cooper Howes. "Nonresidential construction fell 0.1%, however, and there were downward revisions to February and January. On the whole, this lowered our GDP tracking estimate three-tenths, to -0.2%." Macroeconomic Advisers, a widely cited source...

You can blame it on the weather. Or no wait: you can blame it on Obama's tax increases. Or perhaps you can blame it on sequestration. Or the Fukushima nuclear disaster, war in Libya, the rich, or Donald Sterling and the NBA. But whatever you do don't blame it on “their” fiscal policy or lack therof. Or monetary policy. Because they are blameless. Once again first-quarter GDP came out and disappointed. Instead of growing at a Wall Street consensus estimate of 1.2% annually, first-quarter GDP came in at an anemic 0.1% annual growth. That's the worst number since the fourth...

The U.S. economy nearly stalled in the first quarter as weakness overseas hurt exports and frigid weather curtailed business investment. While the latest figures are "certainly eye catching, we do not find it to be representative of the underlying health of the U.S. economy," said Richard Moody, chief economist at Regions Financial Corp. "Anyone tempted to panic ... should just take a breath." The latest numbers continue a familiar pattern. The nation's economic recovery, which started in mid-2009, has been marked as much for its choppiness as its slow pace.

Growth in the U.S. economy slowed to a miserly 0.1% annual pace in the first quarter from 2.6% at the end of 2013, a bout of weakness spurred by one of the worst winters in years. Consumer spending, the main driver of the U.S. economy, actually rose 3% after a strong 3.3% gain in the fourth quarter, but the increase was driven mostly by higher outlays on utilities and health care, according to preliminary data released by the Commerce Department on Wednesday. Yet business investment on equipment, another key economic cog, fell 5.5% to mark the biggest drop in almost...