GDP is better than expected for Q3 of 2009! Get the champagne out!

Green shoots are blossoming, Obama is smiling and somewhere Bernanke is patting himself on the back.  Folks, I am pleased to announce that things are looking very rosy and judging by the crooks traders driving the stock market it would appear they agree.  BEA's report confirms the speculation (well at least the headline) so many idiots economists on TV have predicted, things are getting better; GDP increased at an annual rate of 3.5 percent.  Time to put that 401K back to work and buy another house.   

Let's look at the report:

Real federal government consumption expenditures and gross investment increased 7.9 percent
in the third quarter, compared with an increase of 11.4 percent in the second. National defense increased 8.4 percent, compared with an increase of 14.0 percent. Nondefense increased 6.8 percent, compared with an increase of 6.1 percent.
Yay.  Glad to see our government is hard at work spending like the drunken sailors that they are.  They should be reducing spending not increasing it, are are broke!
Current-dollar personal income decreased $15.5 billion (0.5 percent) in the third quarter, in contrast to an increase of $19.1 billion (0.6 percent) in the second.
So we are making less money now, substantially less in comparison to the previous quarter.  Not good.
Personal current taxes increased $4.8 billion in the third quarter, in contrast to a decrease of $119.1 billion in the second.
Ugh, that is disappointing, we are making less money yet the government is actually making more.  This is precisely the opposite of what should be happening in overly bloated consumption ridden economy.  We need personal incomes to go up so people can pay off debt and we need to curtail the chief consumer (government) not enable it. 
Disposable personal income decreased $20.4 billion (0.7 percent) in the third quarter, in contrast to an increase of $138.2 billion (5.2 percent) in the second. Real disposable personal income decreased 3.4 percent, in contrast to an increase of 3.8 percent.
This is getting depressing.  Our ability to purchase goods is plummeting sharply (naturally as a combination of higher taxes, falling wages) and this will further hamper our ability to climb out of the hole we got ourselves into.  If you were to consider the inflation (money printed by the fed) and value of the dollar falling then in reality our purchasing power is probably worse than the report suggests.
Personal outlays increased $148.2 billion (5.8 percent) in the third quarter, compared with an
increase of $8.2 billion (0.3 percent) in the second. Personal saving -- disposable personal  income less personal outlays -- was $364.6 billion in the third quarter, compared with $533.1 billion in the second. The personal saving rate -- saving as a percentage of disposable personal income -- was 3.3 percent in the third quarter, compared with 4.9 percent in the second.
That confirms it. The one positive aspect of the 2008 housing bubble burst was the propensity for people to save and start paying down debt.  Only saving real money can enable the consumer to make prudent decision despite what the mainstream economists want you to believe, saving will facilitate the popping of this faux economy built on cheap money circulated by the central bank.  This is now eroding.


Lastly, the actual number is an estimate and will most likely be revised, because as with all official government statistics the room for error is massive.  There is nothing good in this report what so ever other than the headline.  We are worse off now than we were a quarter ago and the path to recovery is going to get bumpier.  Put away that champagne. 

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