Phantom GDP and job numbers.
Job loss is low because Gobmint hired GSP taggers to map every house in the country. But they also needed to add another 220K phantom jobs using birth/death model. Now they revised the last two job reports up by another 66000.
O man's Orwillian world is in full bloom.
Weak Imports Goose GDP
Message 25630546
>>>Consider the article below in the context that when the Q1 GDP data were gathered, crude was as low as $35. This AM its at $58. Sooooooooo given the negative negative described below, we probably have a negative, negative, negative. IOW...Q2 GDP could be really ugly on increased imports on higher crude prices. I am tempted to chase crude stocks here but I won't. I still see S&P sub 700 for a retest or perhaps even lower.<<<
Barry Ritholtz | May 1, 2009
On Wednesday, I noted that “GDP would have been even worse, if it wasn’t for how fast imports have plummeted; They are falling faster than exports, perversely creating a appearance of relative improvement . . .” Robert F. Dieli, Ph.D. is a longtime observer of Wall Street and the Economy. His site is No Spin Forecast, where he runs Mr. Model, and his Analysis of First Quarter 2009 Real GDP — especially his take on the impact of these weaker imports on final GDP numbers — is dead on:
“An explanation about why the decline in imports is helping GDP growth. As you know, imports are subtracted from GDP. Because imports are declining in absolute terms, you get a positive effect from a negative negative. Just to be clear as to what this chart is telling us: the drop in imports contributed 6.05 percentage points to the GDP growth rate.
What this means is that without the contribution from imports, GDP declined at 12.15% annual rate in Q1. In other words, all of the domestic activity was, as the employment numbers suggested, in free fall! Now, this has some important implications for the profile of growth going forward. When imports stop dropping, and they will, the sign on this term will go back to its normal negative, and when it does, it will expose the true growth rate of the domestic economy. We had best hope that GPDI has gotten back on track by the time the positive effect of negative import growth wears off.”
In other words, without the impact of slowing imports, annualized GDP contraction would have been about 12%.
As is so often the case, the picture is terribly instructive: |
