Yesterday’s party got a smackdown this morning with the final GDP first quarter reading. There was much nodding of heads that the number would be unchanged. Wrong. It went from 2.5% to 2.4% to the final 1.77%. That’s puny.
On top of that, zerohedge sees “the collapsing US consumer whose true colors have finally come out in the final Q1 GDP revision: responsible for 2.40% of the GDP print in the first revision, Personal Consumption Expenditures tumbled to just 1.83% of GDP. In absolute terms, PCE plunged from 3.4% to 2.6% on expectations of 3.4%. There goes the buying power of the overlevered, undersaved US consumer.
“And perhaps just as disturbing was that Fixed Investment, i.e. CapEx, cratered to only 0.39% of the GDP print, down from 0.53% in the first revision, and 0.52% in the prelim. This was the lowest Fixed Investment number since Q3 of 2012.What is worst, is that non-residential fixed investment crashed from 2.2% to 0.4%. In other words, growth CapEx is now officially dead.”
But don’t expect these numbers to get a lot of play. The media doesn’t believe Obama is responsible for anything bad that happens.