"No warning can save people determined to grow suddently rich" - Lord Overstone

  • 14 hours Twitter CEO: The World Will Have A Single Currency
  • 15 hours Asian Currency Correction Could Signal Looming Crisis
  • 16 hours Best Buy Drops Telecom Giant Over National Security Threat
  • 17 hours The Pros And Cons Of The Federal Interest Rate Hike
  • 19 hours Good News For Gold Bulls Despite Interest Rate Hike
  • 20 hours Trump Hits China With $50 Billion In Tariffs
  • 21 hours Russian Gold Reserves Hit Record High Amid Rising Tensions With West
  • 23 hours Stocks Pull Back Following Interest Rate Hike
  • 2 days Will Regulatory Rollbacks Make Banks 'Too Big To Fail?'
  • 2 days Elon Musk’s $2.6 Billion Tesla Challenge
  • 2 days Tech Giants Could Be First Victims Of U.S. Trade War
  • 2 days Dow Gains Despite Fed’s Rate Hike
  • 2 days The Biggest Threat To Chinese Oil Futures
  • 2 days Spending Bill Could Cause U.S. Debt To Soar To 99% Of GDP
  • 2 days Precious Metals Slide Ahead Of Fed’s Interest Rate Decision
  • 2 days China’s Soft Power Grab May Be Bad News For Emerging Economies
  • 3 days The Secretive Wall Street Firm Betting On Bitcoin
  • 3 days ‘Data Is King’: The Oil Industry’s Next Most Valuable Resource
  • 3 days Google Invests $300 Million To Combat Fake News
  • 3 days Zuckerberg Dodges A Bullet As Facebook Loses Billions
Trump's Trade War Nears Boiling Point

Trump's Trade War Nears Boiling Point

Trump’s trade war appears to…

Q1 2011 GDP Revision

The first of two revisions for Q1 2011 Real GDP came in unchanged at 1.8%. Internally though this report is rather concerning.

In a previous post I discussed the increased probability of Q2 GDP contracting (found here) with inventory, government and or trade the most likely sources.

The assumption with that forecast was that the consumer component of GDP would continue to contribute to growth, yet this revision shows the complete opposite occurring making the probability of contraction that much higher.

The consumer contribution to GDP fell from 1.92% to 1.52% down from 2.80% in Q4.

Final sales (a measure of GDP minus inventory changes) was revised lower from .84% to .65% reflecting the weakness in the consumer.

Inventory was in fact revised higher from .93% to 1.19% thus offsetting the drag from the consumer. This raises a big flag though because if consumer demand is falling there is no incentive for manufacturers and retailers to grow inventory.

Increased inventory levels contributed strongly to recent economic growth but should retailers view these levels as adequate or excessive they will in fact begin contracting until consumer demand picks up.

Real GDP
Larger Image


Back to homepage

Leave a comment

Leave a comment

Sign Up For The Safehaven Newsletter