USA GDP a Flat +0.1% in Fourth Quarter 2012

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Bureau of Economic Analysis: Gross Domestic Product

(Bureau of Economic Analysis) Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 0.1 percent in the fourth quarter of 2012 (that is, from the third quarter to the fourth quarter), according to the "second" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 3.1 percent.

The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month. In the advance estimate, real GDP declined 0.1 percent. The upward revision to the percent change in real GDP is smaller than the average revision from the advance to second estimate of 0.5 percentage point. While today’s release has revised the direction of change in real GDP, the general picture of the economy for the fourth quarter remains largely the same as what was presented last month

The increase in real GDP in the fourth quarter primarily reflected positive contributions from personal consumption expenditures (PCE), nonresidential fixed investment, and residential fixed investment that were partly offset by negative contributions from private inventory investment, federal government spending, exports, and state and local government spending. Imports, which are a subtraction in the calculation of GDP, decreased.

The deceleration in real GDP in the fourth quarter primarily reflected downturns in private inventory investment, in federal government spending, in exports, and in state and local government spending that were partly offset by an upturn in nonresidential fixed investment, a larger decrease in imports, and an acceleration in PCE.

USA GDP Change by Quarter (QoQ %)



USA Real GDP Change by Quarter (QoQ %): Components



USA Real GDP Totals by Quarter ($)



Real GDP Component Totals by Quarter ($)



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USA GDP Contracts -0.1% in Fourth Quarter 2012

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Bureau of Economic Analysis: Gross Domestic Product

(Bureau of Economic Analysis) Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- decreased at an annual rate of 0.1 percent in the fourth quarter of 2012 (that is, from the third quarter to the fourth quarter), according to the "advance" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 3.1 percent.

The Bureau emphasized that the fourth-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 4 and the "Comparisons of Revisions to GDP" on page 5). The "second" estimate for the fourth quarter, based on more complete data, will be released on February 28, 2013.

The decrease in real GDP in the fourth quarter primarily reflected negative contributions from private inventory investment, federal government spending, and exports that were partly offset by positive contributions from personal consumption expenditures (PCE), nonresidential fixed investment, and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, decreased.

The downturn in real GDP in the fourth quarter primarily reflected downturns in private inventory investment, in federal government spending, in exports, and in state and local government spending that were partly offset by an upturn in nonresidential fixed investment, a larger decrease in imports, and an acceleration in PCE.

USA GDP Change by Quarter (QoQ %)



USA Real GDP Change by Quarter (QoQ %): Components



USA Real GDP Totals by Quarter ($)



Real GDP Component Totals by Quarter ($)



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Peter Schiff: Dow 14,000, GDP, Jobs, Fed, Inflation, Treasuries, Gold!

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Peter Schiff

Dow 14,000, GDP, Jobs, Fed, Inflation, Treasuries, Gold!

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World Bank Projects Slow Economic Growth

Global Economic Prospects 2013: Assuring Growth Over the Medium Term The World Bank projects slow economic growth in 2013. World economic growth is projected to be about the same as 2012: +2.4% vs. +2.3%. Some countries will accelerate growth in 2013 (Brazil, Russia, India, China) while some decelerate slightly (USA, OECD, Japan). GDP growth in general will rebound in 2014 and 2015, but the "road ahead remains bumpy".

High Income Countries GDP by Year The World will outperform the higher income countries and areas from 2013 through 2015. The USA is forecast to outperform the OECD, Japan, and the Euro Area from 2013 through 2015. However, the USA will underperform the World average. Japan is forecast to outpace the Euro Area, which will continue in a recession through 2013.



BRIC Countries GDP by Year China continues to lead BRIC and the World, but at a slowing pace. India continues in second with Brazil overtaking Russia in 2014. All 4 BRIC countries are projected to outperform the World average.



World GDP by Year Developing Countries continue to lead the World and High Income Countries.



World Bank Urges Developing Countries to Safeguard Economic Growth, as Road Ahead Remains Bumpy (Jan 13, 2012) WASHINGTON, January 15, 2013 – Four years after the onset of the global financial crisis, the world economy remains fragile and growth in high-income countries is weak. Developing countries need to focus on raising the growth potential of their economies, while strengthening buffers to deal with risks from the Euro Area and fiscal policy in the United States, says the World Bank in the newly-released Global Economic Prospects (GEP) report.

World Bank President: Growth in High and Low Income Countries Remains Weak "We can't wait for a return to growth in high-income countries," says World Bank Group President Jim Yong Kim. "So we have to continue to support developing countries in making investments in infrastructure, in health, in education." Four years after the onset of the global financial crisis, the world economy remains fragile and growth in high-income countries is weak, says the new Global Economic Prospects Report.



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The Conference Board Raises US GDP Projections

The Conference Board: The U.S. Economic Forecast

The Conference Board has raised their annual US GDP projections since last reviewed in October. The 2013 annual GDP projection was raised +0.4% to a still slow +1.8%. This was after reducing the projection in October a whopping -0.9% to a meager +1.4% from a hopeful +2.3%. This portends more of the same - slow, muddling growth with no restoration of pre-recession economic vitality plus a post-recession and subsequent near recovery low.

The 2012 GDP projection was increased slightly +0.1% to +2.2%, which is still better than the 2011 GDP of +1.8%. The initial estimate for 2014 is a more encouraging +2.4%.



Quarterly GDP projections were mixed, most notably Q4 2012 was slashed a game-changing -1.0% to +0.9% from +1.9%. The year 2013 is projected to begin slow in Q1 (+1.4%) and Q2 (+1.5%) before the pace quickens in Q3 (+2.4%). This is an improvement from the prior, and dismal, projections of +0.90%, +0.80%, and +2.4%, respectively.



Actual GDPs are per the Bureau of Economic Analysis. Projected GDPs are per The Conference Board.

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USA GDP 3.1% at 3-Quarter High

Bureau of Economic Analysis: Gross Domestic Product

(Bureau of Economic Analysis) Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 3.1 percent in the third quarter of 2012 (that is, from the second quarter to the third quarter), according to the "third" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 1.3 percent.

The GDP estimate released today is based on more complete source data than were available for the "second" estimate issued last month. In the second estimate, the increase in real GDP was 2.7 percent (see "Revisions" on page 3). The third estimate has not greatly changed the general picture of the economy for the third quarter except that personal consumption expenditures (PCE) is now showing a modest pickup, and imports is now showing a downturn.

The increase in real GDP in the third quarter primarily reflected positive contributions from PCE, private inventory investment, federal government spending, residential fixed investment, and exports that were partly offset by a negative contribution from nonresidential fixed investment. Imports, which are a subtraction in the calculation of GDP, decreased.

The acceleration in real GDP in the third quarter primarily reflected upturns in private inventory investment and in federal government spending, a downturn in imports, an upturn in state and local government spending, and an acceleration in residential fixed investment that were partly offset by a downturn in nonresidential fixed investment and a deceleration in exports.

USA GDP by Percentage





USA GDP by Dollars





There is a more important chapter developing in the Story of America. The annualized GDP is $15+ trillion and the funded national debt is now $16+ trillion. Yes, the USA funded debt exceeds GDP as the federal budget deficits continue uncontrolled. The funded sovereign debt to GDP ratio has now exceeded 100%. The unfunded debt is much higher and Washington pretends that doesn't exist. An updated review of this USA milestone and the upcoming American Day of Reckoning is reviewed periodically:

America: Land of Indefinite Corporate Power, Debt, Detention, Quantitative Easing, Wars

USA Sovereign Debt Now Exceeds GDP: Greetings From Big Brother

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USA GDP an Unsustainable and Overstated +2.0%

Bureau of Economic Analysis: Gross Domestic Product

The Bureau of Economic Analysis released the first (advance) estimate of Q3 2012 GDP which was +2.0% quarter over quarter (annualized), an increase from the prior Q2 2012 estimate of +1.3%, and a drop from Q4 2011 of +4.1% peak. The total GDP reached an all-time high $15.78 trillion annualized. The GDP has increased quarter over quarter for 13 consecutive quarters, since Q3 2009. Since the Great Recession, growth rates have ranged from a near-recessionary +0.1% in Q1 2011 to a robust +4.1% in Q4 2011.

The latest GDP data indicates the economic growth profile is unsustainable long-term because government spending was +0.71% of the +2.0% total. This public sector spending consisted of federal spending of +0.72% and state & local spending of -0.01%. A significant portion of that federal spending was borrowed, not taxes collected and disbursed. So economic growth was leveraged by borrowing and increasing USA sovereign debt at the current artificially low interest rates held down by the Federal Reserve.

A decline in exports pulled down GDP by a moderate -0.23% and a slowing of imports raised GDP a meager +0.04%. The old faithfuls of consumer spending on goods (+1.03%) and services (+0.39%) kept the economy going. Private domestic investment of a slim +0.07% was the final negligible boost to USA economic growth. Rounding was -0.01%.

The latest GDP data indicates economic growth is overstated because inflation, and therefore the GDP deflator, was a +2.8% seasonally adjusted annual rate. Is inflation really just +2.8%? If you think so, then the GDP deflator is accurate. If you disagree, then the Q3 2012 GDP of +2.0% is overstated accordingly by the amount of additional inflation that should be accounted for (some estimates are as high as 6%+).

USA GDP by Percentage





USA GDP by Dollars





There is a more important chapter developing in the Story of America. The annualized GDP is $15+ trillion and the funded national debt is now $16+ trillion. Yes, the USA funded debt exceeds GDP as the federal budget deficits continue uncontrolled. The funded sovereign debt to GDP ratio has now exceeded 100%. The unfunded debt is much higher and Washington pretends that doesn't exist. An updated review of this USA milestone and the upcoming American Day of Reckoning is reviewed periodically:

America: Land of Indefinite Corporate Power, Debt, Detention, Quantitative Easing, Wars

USA Sovereign Debt Now Exceeds GDP: Greetings From Big Brother

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The Conference Board Lowers USA GDP Projections

The Conference Board: The U.S. Economic Forecast

The Conference Board has lowered their quarterly and annual USA GDP projections since last reviewed in April. The 2013 annual GDP projection was reduced a whopping -0.9% to a meager +1.4% from a hopeful +2.3%. This portends more of the same - slow, muddling growth with no restoration of pre-recession economic vitality plus a post-recession and subsequent recovery low. The 2012 GDP projection was lowered only slightly -0.1% to +2.1% from +2.2%, which is still better than the 2011 GDP of +1.8%.



Quarterly GDP projections were also lowered, most notably Q1 2013 which was slashed a game-changing -1.6% to +0.9% from +2.5%. Q3 2013 is just as dismal, projected at +0.8%. Hence the overall annual 2013 lowered projection. Somehow American economic life becomes better in Q3 2013 with an estimated +2.4% GDP. Of additional concern is the Q4 2012 projection of only +1.9%. Q4 can be the strong Holiday quarter, which was a robust +4.1% last year and a comparatively decent +2.4% in 2010.



Actual GDPs are per the Bureau of Economic Analysis. Projected GDPs are per The Conference Board.

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IMF: "Gloomier Picture of the Global Economy"

International Monetary Fund: World Economic Outlook

The latest IMF World Economic Outlook again seems one step behind. This is really a World Economic Review, not an Outlook. The latest WEO pronounces a slower global economic recovery and qualifies with heightened risk. Risk must always be mentioned by all who predict and dare to wear the prophet's mantle. The prior WEO reviewed in April was titled "Global Economic Growth Resuming, Dangers Remain".

Key Points:
■ IMF revises forecast down, global growth projected at 3.3 percent this year
■ World trade slumps, hurting emerging markets, developing countries
■ Prospects could improve if clouds over euro area, U.S. “fiscal cliff” are lifted

Overall, most of the GDPs reviewed and charted below were adjusted plus or minus 0.1% to 0.3% for the 2012 and 2013 projections.  Notable GDP decreases since the April 2012 World Economic Outlook were:
■ UK was decreased -0.6% in 2012 to -0.4%, from +0.2%
■ Brazil was decreased -0.6% in 2013 to +4.0%, from +4.6%
■ Euro Area was decreased -0.5% in 2013 to +0.2%, from +0.7%
■ India was decreased -0.5% in 2013 to +6.0%, from +6.5%
■ Advanced Economies were decreased -0.4% in 2013 to +1.5%, from +1.9%

IMF Sees Heightened Risks Sapping Slower Global Recovery (October 9, 2012)

The International Monetary Fund (IMF) presented a gloomier picture of the global economy than a few months ago, saying prospects have deteriorated further and risks increased. Overall, the IMF’s forecast for global growth was marked down to 3.3 percent this year and a still sluggish 3.6 percent in 2013.

The recovery continues, but it has weakened. In advanced economies, growth is now too low to make a substantial dent in unemployment. And in major emerging market economies, growth that had been strong earlier has also decreased. Relative to our April 2012 forecasts, our forecasts for 2013 growth have been revised from 2.0 percent down to 1.5 percent for advanced economies, and from 6.0 percent down to 5.6 percent for emerging market and developing economies.

Regional Key Points:
■ Europe: In the Orbit of the Euro Area Crisis
■ The United States and Canada: Growth Continues, but Slack Remains
■ Asia: Calibrating a Soft Landing
■ Latin America and the Caribbean: Losing Some Buoyancy
■ Commonwealth of Independent States: Growth Is Still Robust
■ Middle East and North Africa: A Two-Speed Region
■ Sub-Saharan Africa: A Continued Favorable Outlook

Actual and Projected GDPs by Year









IMF Sees Heightened Risks Sapping Slower Global Recovery The International Monetary Fund presented a gloomier picture of the global economy than a few months ago, saying prospects have deteriorated further and risks increased.



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Down We Go: USA 2nd Quarter GDP Muddles Along at Overstated +1.3%

Bureau of Economic Analysis: Gross Domestic Product

The Bureau of Economic Analysis released the third (final) estimate of Q2 2012 GDP which was +1.3% quarter over quarter, a decrease from the prior Q1 2012 estimate of +2.0%, and a drop from Q4 2011 of +4.1%. The total GDP reached an all-time high $15.59 trillion annualized. The GDP has increased quarter over quarter for 12 consecutive quarters, since Q3 2009. Growth rates have ranged from a near-recessionary +0.1% in Q1 2011 to a robust +4.1% in Q4 2011.

That's a slow growth rate, but the inflation rate utilized for gross domestic purchases was +0.7% annualized for the quarter. Where in the USA was there such a low inflation rate? There wasn't and you, me, and the BEA know this. So the actual inflation rate is much higher and the higher the real-life inflation rate the lower the headline GDP growth rate. At best the GDP for Q2 2012 was hovering around 0.00% and probably was negative, which defines a recession. Therefore, GDP is overstated and Washington horse hockey!



The Big Question: Where is the USA economy headed? An offiicial recession in 2012 does not appear probable unless the BEA decides so. So the storyline is the USA economy is growing very slowly. Unofficially America is probably in a recession as noted above. Three scenarios are usually discussed: (1) a double dip recession whereby the GDP will turn negative yet again with a higher unemployment rate, (2) the economy will continue "bottom bouncing" with slow to very slow growth and a continuing relatively high unemployment rate, or (3) the bottom is in and GDP growth will accelerate and full employment and is on the horizon.

Scenario (2) with slow to very slow officially-reported economic growth and a continuing relatively high unemployment rate has been occurring per the BEA in Washington and is the most likely scenario for 2012, with an annual GDP growth projected of approximately +2.0%. The average of the most recent 4 quarters reported by the Bureau of Economic Analysis is +2.18%.



There is a more important chapter developing in the Story of America. The annualized GDP is $15+ trillion and the funded national debt is now $16+ trillion. Yes, the USA funded debt exceeds GDP as the federal budget deficits continue uncontrolled. The funded sovereign debt to GDP ratio has now exceeded 100%. The unfunded debt is much higher and Washington pretends that doesn't exist.

In the minds of many Americans, the 100% benchmark is usually surpassed by socialist and totalitarian countries as these misguided, financially inept nations implode into chaos and poverty. An updated review of this USA milestone and the upcoming American Day of Reckoning is reviewed periodically:

America: Land of Indefinite Corporate Power, Debt, Detention, Quantitative Easing, Wars

USA Sovereign Debt Now Exceeds GDP: Greetings From Big Brother

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USA Second Quarter GDP a Higher 1.7%

Bureau of Economic Analysis: Gross Domestic Product

The Bureau of Economic Analysis released the second estimate of Q2 2012 GDP which was +1.7% quarter over quarter, an increase from the prior (advance) Q1 2012 estimate of +2.0%, and a drop from the previous Q4 2011 of +4.1%. The total GDP reached an all-time high $15.606 trillion annualized. The GDP has increased quarter over quarter for 12 consecutive quarters, since Q3 2009. Growth rates have ranged from a near-recessionary +0.1% in Q1 2011 to a robust +4.1% in Q4 2011.

Inflation Adjustment The price index for gross domestic purchases increased to 0.8 percent in the second quarter, an upward revision of 0.1 percentage point.

USA Real GDP by Quarter (%)



USA Real GDP by Quarter ($)



Bureau of Economic Analysis Statement

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 1.7 percent in the second quarter of 2012 (that is, from the first quarter to the second quarter), according to the "second" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 2.0 percent.

The increase in real GDP in the second quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, nonresidential fixed investment, and residential fixed investment that were partly offset by negative contributions from private inventory investment and from state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased.

The deceleration in real GDP in the second quarter primarily reflected decelerations in PCE, in nonresidential fixed investment, and in residential fixed investment that were partly offset by a smaller decrease in federal government spending, an acceleration in exports, and a smaller decrease in private inventory investment.

USA Sovereign Debt Exceeds GDP: Government Handout Heaven

The USA public debt continues greater than the annual GDP. That is, the government of Republicans and Democrats are spending more than can be justified by government income. Therefore the debt ratio continues greater than 100%. This has been a concerted, long-term bi-partisan effort to reach this pathetic moment in American history. My commentary is non-partisan.

Egan-Jones warned about this in their downgrade of United States sovereign debt to AA. Fitch Ratings reiterated it would cut the USA sovereign credit rating from AAA next year if a credible fiscal consolidation plan, deficit reduction, is not implemented. This is disturbing plus foolhardy as Americans enjoy the free ride while they can. Your share of the United States public debt is $50,688 and add another $1,596 for your share of this year's interest expense if you, a debt-ridden American, prefer not to roll the interest into the debt.

The two-party corporate political system kicks this debt bomb down the road with the blessings of their constituency and financial supporters. This is because a majority of Americans have bought into the fallacy that the government works for them and should be in charge of their lives in the name of the public good, safety, health, protection against the latest terrorists/enemies, and/or (insert your rationale here). Never mind this extravagant spending and ever-increasing government matrix must be charged to the sovereign credit card and not paid for in cash.

Of course, the government is actually for the benefit of the lobbyists, maximizing their profits, and keeping you under control. But just enough morsels are tossed out to the masses so they buy into the myth: "Government is the great fiction, through which everybody endeavors to live at the expense of everybody else" (Frederic Bastiat). The problem is this fiction cannot sustain itself and ultimately a Day of Reckoning cometh for the USA. The morsels will stop at that Day for American citizens. The government domestic security platform that is being built up rapidly will sure come in handy to keep you subdued, obedient, and compliant when the American Dream crashes into flames...



This fiscal lunacy doesn't stop the federal spending on wars & military budgets, Homeland Security, TSA, NSA, CIA, & police state infrastructure, federal employee & military pensions & benefits, corporate welfare & subsidies, individual tax breaks & credits, social benefits & care, now the Affordable Health Care Act, and all the other free stuff and handouts every last American wants. A significant portion of this spending has to be funded by borrowing (30%+ of every dollar spent) and this keeps the fiction alive that you live in the Land of the Free. The major media, the corporate advertising delivery system, will continue to affirm this make-believe world for you and will act just as surprised as you when the Day of Reckoning arrives.



To perpetuate these unsustainable fiscal and monetary policies as long as possible, Chairman Ben Bernanke and the Bankster-controlled Federal Reserve must keep interest rates crammed down in a zero-interest rate environment, buy U.S. Treasury securities, and print money. He doesn't get one bit of assistance from the President or Congress to stop this madness as they dance to the tune of the lobbyists and show no inclination to balance the budget even for one year. A long-term balanced budget, which doesn't even have to be honored, is impossible as well (remember the Super Committee sham?). If the Fed doesn't perpetuate this Ponzi scheme, the entire American Dream would blow up right now instead of the inevitable "later".

The interest expense on the USA's ever-increasing debt could skyrocket easily to $1 trillion annually if the interest rates got loose from Bernanke! Not only that, some of the Too Big To Fail banks might actually become insolvent from interest rate shock and counter party panic. The entire frigging financial system might meltdown! It's hard out here for the Wall Street Banksters! Ask JPMorgan CEO Jamie Dimon, Goldman Sachs CEO Lloyd Blankfein, and their accomplices about that!



Charts consist of the latest data available from the Bureau of Economic Analysis (GDP at 6-30-12), U.S. Treasury (Public Debt at 8-2-12), and U.S. Census Bureau (Population at 8-4-12):
Public Debt $15.921 trillion GDP $15.596 trillion
Population 314.090 million
Annualized Interest Expense $501.157 billion
Effective Interest Rate 3.39%

USA Sovereign Debt Now Exceeds GDP: Greetings From Big Brother

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USA Garbage Indicator: Economy Is Diving!

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Waste Carloads Volume as an economic activity indicator

One measure of economic activity is total railway carloads of waste. The idea is the more an economy produces the more waste is generated. Therefore a growing economy will generate significant increases in waste and vice versa.

There is a fairly strong positive correlation (82%) between the year over year change in waste carloads and the year over year change in GDP. The current prognosis? Bad. The USA economy is diving.

Waste Carloads YoY Compared to USA GDP YoY

Business Insider: The US Garbage Indicator Is Sending An Ominous Sign For The Economy 7-26-12

Bloomberg: Waste on Freight Cars Rebounds 6-9-10

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USA GDP Revisions Reveal Slower Economic Recovery

Bureau of Economic Analysis: Gross Domestic Product


BEA Revisions Reveal Slower Economic Recovery The Bureau of Economic Analysis GDP revisions indicate about the same overall story as reported in the prior year July 2011 revisions. The revisions from Q1 2009 through Q1 2012 reveal a slower economic recovery than originally reported. The recovery officially started in Q3 2009 and the average quarterly "recovery" GDP to-date was originally reported as +2.46%. The revised overall quarterly "recovery" average is now +2.26%.

BEA Revisions Reveal Worse Great Recession The Bureau of Economic Analysis GDP revisions from Q3 2008 through Q2 2009 (the Great Recession) reveal a worse recession than originally reported. The plunge in GDP was deeper. The average quarterly "recession" GDP originally was reported as -4.10%. The revised overall quarterly "recession" average is now -4.55%.



The latest data reflects the regular annual revision of the national income and product accounts, beginning with the estimates for the first quarter of 2009. This revision incorporates source data that are more complete, more detailed, and otherwise more reliable than those previously available. A later post will review these revisions compared to the prior GDP data reported.



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