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GDP Stabilizes, Shows Modest Year-Over-Year Growth

April 30, 2021

Posted on 29 April 2021
Written by Rick Davis, Consumer Metrics Institute

In their first (preliminary) estimate of the US GDP for the first quarter of 2021, the Bureau of Economic Analysis (BEA) reported that the US economy was growing at a +6.39% annual rate, up 2.07 percentage points (pp) from the prior quarter.Please share this article – Go to very top of page, right hand side, for social media buttons.For the first time in four quarters the year-over-year numbers were also looking positive. The overall year-over-year first quarter growth of the US GDP was reported to be +2.26%, with consumer spending on goods (+13.85%) and commercial fixed investments (+7.08%) leading the way. Even the year-over-year contraction in consumer spending on services was a manageable -1.35%.In an

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GDP Growth Is Good But Normalcy Is Still Far Away

March 26, 2021

Posted on 25 March 2021
Written by Rick Davis, Consumer Metrics Institute

In their third and final estimate of the US GDP for the fourth quarter of 2020, the Bureau of Economic Analysis (BEA) reported that the US economy was growing at a +4.32% annual rate, up 0.23 percentage points (pp) from their previous estimate and down -29.12pp from the prior quarter.Please share this article – Go to very top of page, right hand side, for social media buttons.The 0.23pp positive revision in the headline number was provided by an upward 0.26pp revision in inventories. This BEA revision showed that the contraction in consumer spending on goods was somewhat worse than previously reported, but that change was mostly offset by an upward revision to spending on services. None of the other line item

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3Q GDP Numbers Mask Continuing Recession

November 26, 2020

Posted on 25 November 2020
Written by Rick Davis, Consumer Metrics Institute

BEA Nudges Estimated Third Quarter 2020 GDP Growth Downward to 33.07%In their second estimate of the US GDP for the third quarter of 2020, the Bureau of Economic Analysis (BEA) reported that the US economy was growing at a +33.07% annual rate, down -0.02 percentage points (pp) from their previous estimate but still up 64.46pp from the prior quarter.Please share this article – Go to very top of page, right hand side, for social media buttons.There are no material revisions in this report. Some of the growth in consumer spending was shifted from services to goods, while reducing the overall consumer spending by -0.06pp. Growth in commercial and private fixed investments was adjusted upward by +0.27pp, but

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3Q 2020 GDP: “V” Stands For Vacuous

October 30, 2020

Posted on 29 October 2020
Written by Rick Davis, Consumer Metrics Institute

BEA: Third Quarter 2020 GDP Grew at a 33.09% RateIn their first (preliminary) estimate of the US GDP for the third quarter of 2020, the Bureau of Economic Analysis (BEA) reported that the US economy was growing at a +33.09% annual rate, up 64.48 percentage points (pp) from the prior quarter.Please share this article – Go to very top of page, right hand side, for social media buttons.No, despite what incumbent politicians are likely to claim, the economy was not growing at a +33% rate last quarter. And the recession is not over.This astounding headline number is a consequence of the BEA’s methodology of annualizing quarter-to-quarter changes, similar to last quarter’s preliminary headline of a catastrophic

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Final 2Q 2009 GDP Estimate – The Same Rehash

October 1, 2020

Posted on 30 September 2020
Written by Rick Davis, Consumer Metrics Institute

September 30, 2020 – BEA Revises Second Quarter 2020 GDP Contraction Slightly Upward to -31.39%:In their third and final estimate of the US GDP for the second quarter of 2020, the Bureau of Economic Analysis (BEA) reported that the US economy was contracting at a -31.39% annual rate, up 0.32 percentage points (pp) from their previous estimate — but still down -26.42pp from the prior quarter.Please share this article – Go to very top of page, right hand side, for social media buttons.This revision consists of line item adjustments that, in the grand scheme of things, are largely immaterial and merely statistical noise. The line item re-allocations consist primarily of a slight lessening of the contraction

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Historically Bad GDP Report Looks Worse Than It Actually Is

July 31, 2020

Posted on 31 July 2020
Written by Rick Davis, Consumer Metrics Institute

BEA Reports that Second Quarter 2020 GDP Contracted at a -32.91% RateIn their first (preliminary) estimate of the US GDP for the second quarter of 2020, the Bureau of Economic Analysis (BEA) reported that the US economy was contracting at an unprecedented -32.91% annual rate, down -27.94 percentage points (pp) from the prior quarter. Please share this article – Go to very top of page, right hand side, for social media buttons.No, the US economy did not shrink by nearly 33% during the second quarter. Although there are some legitimately startling numbers in the release, the size of the headline number is a consequence of "annualizing" a single quarter of dramatic economic displacement. Even though those

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GDP Report Bides Time Before ‘The Big One’

June 26, 2020

Posted on 25 June 2020
Written by Rick Davis, Consumer Metrics Institute

BEA Revises First Quarter 2020 GDP Contraction Slightly Upward to -4.99%In their third and final estimate of the US GDP for the first quarter of 2020, the Bureau of Economic Analysis (BEA) reported that the US economy was contracting at a -4.99% annual rate, up 0.07 percentage points (pp) from their previous estimate and down -7.11pp from the prior quarter.Please share this article – Go to very top of page, right hand side, for social media buttons.Unfortunately, this report merely fine tunes statistical noise from previous reports — reports that have been rendered completely meaningless by events still in progress. By analogy, this is a season ending game between two miserable teams that have long since been

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1Q 2020 GDP Estimate Revised Lower

May 29, 2020

Posted on 28 May 2020
Written by Rick Davis, Consumer Metrics Institute

In their second estimate of the US GDP for the first quarter of 2020, the Bureau of Economic Analysis (BEA) reported that the US economy was contracting at a -5.06% annual rate, down -0.27 percentage points (pp) from their previous estimate and down -7.18pp from the prior quarter.Please share this article – Go to very top of page, right hand side, for social media buttons. The overall downward revision in the headline number was in spite of a +0.57pp upward revision to their previous consumer spending estimate. The largest change for this reporting cycle was a -0.90pp downward revision to inventories. Since inventories are not reflected in the BEA’s own ‘bottom line’ Real Final Sales, that number was revised

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A Wider Societal Divide May Be Opening In The U.S.

April 30, 2020

Posted on 29 April 2020
Written by Rick Davis, Consumer Metrics Institute

GDP Declines Sharply First Quarter 2020In their first (preliminary) estimate of the US GDP for the first quarter of 2020, the Bureau of Economic Analysis (BEA) reported that the US economy was contracting at a -4.79% annual rate, down -6.91 percentage points (pp) from the prior quarter.Please share this article – Go to very top of page, right hand side, for social media buttons.This report begins to reflect the impact of the Covid-19 pandemic. The details are nearly all negative, with (as expected) consumer spending on services taking the biggest hit. And particularly telling is the reported increase in the household savings rate, which increased a full 2pp to 9.6%, the highest level since the fourth quarter

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Brace For The Steepest And Deepest Contraction In At Least A Century

March 27, 2020

Posted on 26 March 2020
Written by Rick Davis, Consumer Metrics Institute

BEA Nudges Fourth Quarter 2019 GDP Growth Upward to 2.12%In a mostly meaningless third and final estimate of the US GDP for the fourth quarter of 2019, the Bureau of Economic Analysis (BEA) reported that the US economy was growing at a +2.12% annual rate, up 0.03 percentage points (pp) from their previous estimate and up 0.03pp from the prior quarter.Please share this article – Go to very top of page, right hand side, for social media buttons.Although this report is purely statistical noise and does not contain any material new information, we nevertheless provide a full analysis of it below. However, unless you are obsessed with statistical noise, we recommend that you skip down to our summary and commentary

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BEA Revises Third Quarter 2019 GDP Growth Upward To 2.13%

November 28, 2019

Posted on 27 November 2019
Written by Rick Davis, Consumer Metrics Institute

In their second estimate of the US GDP for the third quarter of 2019, the Bureau of Economic Analysis (BEA) reported that the US economy was growing at a +2.13% annual rate, up 0.20 percentage points (pp) from their previous estimate and up 0.12pp from the prior quarter.Please share this article – Go to very top of page, right hand side, for social media buttons.This report contained no material new information about the economy. All of the increased headline growth came from a revision to the previously reported inventory number, which was revised from a slight contraction (-0.05% growth rate) to mild growth (+0.17% growth rate), adding 0.22pp to the headline. None of the other line items impacted the

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Consumer Spending Weakens 3rd Quarter 2019 GDP Growth

October 30, 2019

Posted on 30 October 2019
Written by Rick Davis, Consumer Metrics Institute

October 30, 2019 – BEA Reports that Third Quarter 2019 GDP Grew at a 1.93% Rate: In their first (preliminary) estimate of the US GDP for the third quarter of 2019, the Bureau of Economic Analysis (BEA) reported that the US economy was growing at a +1.93% annual rate, down -0.08 percentage points (pp) from the prior quarter.The minor change in the headline masked a material weakening in the growth of consumer spending. The growth rate for aggregate consumer spending on goods and services was reported to be over 1% lower (-1.10pp) than in the prior quarter. The growth of governmental spending (Federal, state and local) also weakened by about half of that amount. But largely offsetting those negative impacts

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Consumer Continues To Carry GDP Load

August 30, 2019

Posted on 29 August 2019
Written by Rick Davis, Consumer Metrics Institute

August 29, 2019 – BEA Leaves Second Quarter 2019 GDP Growth Essentially Unchanged at 2.04%: In their second estimate of the US GDP for the second quarter of 2019, the Bureau of Economic Analysis (BEA) reported that the US economy was growing at a +2.04% annual rate, down -0.01 percentage points (pp) from their previous estimate and down -1.05pp from the prior quarter.Please share this article – Go to very top of page, right hand side, for social media buttons.Although the headline number was essentially unchanged, the report did shift material portions of the aggregate growth into the consumer sector from commercial and governmental activities. Specifically, in the consumer sector spending on goods was

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First Estimate 2Q GDP Stronger Than Many Predicted, Buoyed By Consumer Spending

July 29, 2019

Posted on 27 July 2019
Written by Rick Davis, Consumer Metrics Institute

July 26, 2019 – BEA Reports that 2nd Quarter 2019 GDP Growth Grew at 2.05%: In their first (preliminary) estimate of the US GDP for the second quarter of 2019, the Bureau of Economic Analysis (BEA) reported that the US economy was growing at a +2.05% annual rate, down -1.04 percentage points (pp) from the downward revised prior quarter.Please share this article – Go to very top of page, right hand side, for social media buttons.In this report the BEA also revised all of the numbers for 22 quarters dating back through 2014. Although each of the prior 4 quarters was revised downward (including a material -1.07pp downward revision to the 4th quarter of 2018), the average quarterly revision was a modest +0.02pp

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GDP Estimate 1Q 2019 Remains Strong

June 28, 2019

Posted on 27 June 2019
Written by Rick Davis, Consumer Metrics Institute

June 27, 2019 – BEA Revises 1st Quarter 2019 GDP Growth Slightly Upward to 3.14%: In their third (and final) estimate of the US GDP for the first quarter of 2019, the Bureau of Economic Analysis(BEA) reported that the US economy was growing at a +3.14% annual rate, up +0.07 percentage points (pp) from the previous report, and up +0.98pp from the prior quarter.Please share this article – Go to very top of page, right hand side, for social media buttons.Although the headline revision was relatively modest and some of the details within the report are certainly statistical noise, this revision did make some material shifts in the distribution of the annualized growth. Consumer spending on goods was no longer

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Second Estimate Q1 2019 Slightly Lowered, Consumer Goods Still In Contraction

May 31, 2019

Posted on 30 May 2019
Written by Rick Davis, Consumer Metrics Institute

In their second estimate of the US GDP for the first quarter of 2019, the Bureau of Economic Analysis (BEA) reported that the US economy was growing at a +3.07% annual rate, down -0.11 percentage points (pp) from the previous report, but still up +0.91pp from the prior quarter.Please share this article – Go to very top of page, right hand side, for social media buttons.The details within the revision should be viewed as merely statistical noise. Consumer spending on goods was still reported to be contracting, while the growth rates for fixed investments and inventories were revised modestly lower. Export and Import growth rates had minor and largely offsetting revisions.Household disposable income was revised

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GDP Porridge: Right Temperature, Taste Is Off

April 28, 2019

Posted on 26 April 2019
Written by Rick Davis, Consumer Metrics Institute

First Estimate 1Q 2019 GDPApril 26, 2019 – BEA Estimates 1st Quarter 2019 GDP Growth at 3.18%: In their first (preliminary) estimate of the US GDP for the first quarter of 2019, the Bureau of Economic Analysis (BEA) reported that the US economy was growing at a +3.18% annual rate, up +1.02 percentage points (pp) from the prior quarter.Please share this article – Go to very top of page, right hand side, for social media buttons.The good news in the report came from significantly positive contributions from inventories, governmental spending and foreign trade. The bad news is that the growth rates for the "meat and potatoes" portion of the economy — consumer spending on goods and services, and fixed

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Consumers, Investment, And Government Spending Let GDP Down

March 29, 2019

Posted on 29 March 2019
Written by Rick Davis, Consumer Metrics Institute

BEA Revises 4th Quarter 2018 GDP Growth Downward to 2.16%In their final estimate of the US GDP for the fourth quarter of 2018, the Bureau of Economic Analysis (BEA) reported that the US economy was growing at a +2.16% annual rate, down -0.42 percentage points (pp) from their previous estimate and down -1.20pp from the prior quarter.Please share this article – Go to very top of page, right hand side, for social media buttons.The downward revision in the headline number was driven by weaker estimates of the growth in the consumption of consumer goods (down -0.26pp from the previous report), weaker fixed investments (down -0.15pp from the previous report) and governmental spending (down -0.14pp from the previous

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Strengthening Trade, Final Sales And Investment Numbers Support 4Q 2018 GDP

March 1, 2019

Posted on 28 February 2019
Written by Rick Davis, Consumer Metrics Institute

In their first (shutdown delayed) estimate of the US GDP for the fourth quarter of 2018, the Bureau of Economic Analysis (BEA) reported that the US economy was growing at a +2.58% annual rate, down -0.78 percentage points (pp) from the prior quarter.Please share this article – Go to very top of page, right hand side, for social media buttons.The relatively modest -0.78pp aggregate/net quarter-to-quarter change in the headline number masks a number of significant changes in the underlying line items: annualized inventory growth dropped over two percentage points (-2.20pp) quarter over quarter, foreign trade added +1.77pp to the headline relative to 3Q-2018, and consumer spending growth weakened by -0.46pp

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Without Trade Deficit, 3Q 2018 GDP Would Be 5.35%

December 21, 2018

Posted on 21 December 2018
Written by Rick Davis, Consumer Metrics Institute

21 December 2018 – BEA Revised 3rd Quarter 2018 GDP Slightly Downward to 3.36%In their third and final estimate of the US GDP for the third quarter of 2018, the Bureau of Economic Analysis (BEA) reported that the US economy was growing at a +3.36% annual rate, down -0.14% from their previous estimate and down -0.80% from the prior quarter.Please share this article – Go to very top of page, right hand side, for social media buttons.Although the revisions can be characterized as statistical noise, they generally reinforce several key movements in the economy since the second quarter: consumer spending, commercial spending and exports were revised lower, while inventories were yet again revised upward. As a

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Inventory Build Continues Outsized Contribution To 3Q 2018 GDP

November 29, 2018

Posted on 29 November 2018
Written by Rick Davis, Consumer Metrics Institute

November 28, 2018 – BEA Leaves 3rd Quarter 2018 GDP Unchanged at 3.50% In their second estimate of the US GDP for the third quarter of 2018, the Bureau of Economic Analysis (BEA) reported that the US economy was growing at a +3.50% annual rate, up +0.01% from their previous estimate but still down -0.66% from the prior quarter. Please share this article – Go to very top of page, right hand side, for social media buttons.The +0.01% improvement in the headline number masks a troublesome shift in the composition of that growth from consumer spending to even more inventory growth. The headline contribution from consumer spending on goods and services weakened by -0.24% and the growth is now lower than the

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GDP Estimate 2Q 2018 Improves Slightly

August 30, 2018

Posted on 30 August 2018
Written by Rick Davis, Consumer Metrics Institute

August 29, 2018 – BEA Revises 2nd Quarter 2018 GDP Growth Upward to 4.23%: In their second estimate of the US GDP for the second quarter of 2018, the Bureau of Economic Analysis (BEA) reported that the US economy was growing at a +4.23% annual rate, up +0.16% from their previous estimate and up +2.01% from the prior quarter.Please share this article – Go to very top of page, right hand side, for social media buttons.None of the reported revisions were material. The growth rate for consumer spending for services was revised lower by -0.12%, and there was a -0.03% decline in the growth rate of consumer spending on goods. The contraction rate for inventories moderated slightly (+0.03%) to -0.97%, while the

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2Q 2018 GDP Is “Data Gone Wild”

July 28, 2018

Posted on 27 July 2018
Written by Rick Davis, Consumer Metrics Institute

July 27, 2018 – BEA Estimates 2nd Quarter 2018 GDP Growth at 4.07%: In their first ("Advance") estimate of the US GDP for the second quarter of 2018, the Bureau of Economic Analysis (BEA) reported that the US economy was growing at a +4.07% annual rate, up a significant +1.85% from a revised prior quarter.Please share this article – Go to very top of page, right hand side, for social media buttons.In this report the BEA also performed their annual revisions to previous quarters, this time dating back to 1929. The average quarterly revision to the headline number for the past four quarters was downward and material at -0.19%, while the average quarterly revision for the headline over the period dating back to

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GDP Fades

May 31, 2018

Posted on 30 May 2018
Written by Rick Davis, Consumer Metrics Institute

BEA Revised 1st Quarter 2018 GDP Growth Downward to 2.17%: In their second estimate of the US GDP for the first quarter of 2018, the Bureau of Economic Analysis (BEA) reported that the US economy was growing at a +2.17% annual rate, down -0.15% from their previous estimate and down -0.71% from the prior quarter.Please share this article – Go to very top of page, right hand side, for social media buttons.The growth rate for consumer spending for services was revised lower by -0.13%, which was accompanied by a nearly offsetting +0.11% improvement in consumer spending on goods. Similarly, the growth in inventories declined by -0.30% while the growth in commercial fixed investment rose by a counterbalancing

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Spending For Consumer Goods Contracted In First Quarter

April 28, 2018

Posted on 27 April 2018
Written by Rick Davis, Consumer Metrics Institute

April 27, 2018 – BEA Estimates 1st Quarter 2018 GDP Growth at 2.32%: In their first (preliminary) estimate of the US GDP for the first quarter of 2018, the Bureau of Economic Analysis (BEA) reported that the US economy was growing at a +2.32% annual rate, down -0.56% from the prior quarter.Please share this article – Go to very top of page, right hand side, for social media buttons.The line item details were much weaker than the headline number might suggest. The most stunning news in the report was that consumer spending for consumer goods actually contracted during the quarter at a -0.24% annualized rate (down -1.91% from the prior quarter). Spending on consumer services also softened to a +0.97% annualized

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Fourth Quarter GDP Estimate Virtually Unchanged

March 1, 2018

Posted on 01 March 2018
Written by Rick Davis, Consumer Metrics Institute

February 28, 2018 – BEA Leaves 4th Quarter 2017 GDP Growth Essentially Unchanged at 2.53%: In their second estimate of the US GDP for the fourth quarter of 2017, the Bureau of Economic Analysis (BEA) reported that the US economy was growing at a +2.53% annual rate, down -0.01% from their previous estimate and down -0.63% from the prior quarter.Please share this article – Go to very top of page, right hand side, for social media buttons.This report contains no material revisions. The largest change consisted of a shift of 0.15% growth from consumer goods spending to consumer services spending. Otherwise, no line item in the report changed by more than +/- 0.03%. The BEA’s "bottom line" for the quarter (their

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