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Us Q4 Gdp Figures Revised Downwards To 2.8% (Down 0.4 From Original)

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Real gross domestic product (GDP) increased 2.8 percent in the fourth quarter of 2010 after increasing 2.6 percent

in the third quarter, according to estimates released today by the Bureau of Economic Analysis. The fourth-quarter

growth rate was revised down 0.4 percentage point from the advance estimate released in January.


Again we have the Goebbels Information Bureau that puts forward "advance" estimates that are ridiculously rosy, and then is forced to revise them downward.

It of course gets "better" if you look at the somewhat-more-detailed version of the report:

Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever

produced -- decreased 0.6 percent in the fourth quarter, in contrast to an increase of 4.2 percent in the third.

Wait a second.... I thought that GDP increased and PCE was up too?! Well, yes. We are exporting some more, and that's where you've seen the "growth." But domestic purchases went down despite the claimed PCE numbers, and thus the so-called "economic recovery" from the standpoint of the United States consumer - you know, the people that matter in this country and which has to be funded with current personal economic output - in fact reverted to a net loss in the 4th quarter.

The culprits? Inventory build disappeared while state and local government spending decreased (they're broke and can't play QEx games - a game that the Federal Government will ultimately be forced to cease as well.)

Real GDP rose 2.8 percent in 2010. In 2009, real GDP declined 2.6 percent. The upturn in growth in 2010 mainly reflected upturns in exports, nonresidential fixed investment (notably equipment and software), consumer spending, and inventory investment.

Remember yesterday's durables report? Go look at it again and pay particular attention to those nice pink-highlighted areas I always pay attention to in the report.

As I like to say (unfortunately in this case): "Here it comes."

Dennigers take on it.

Viva recovery!

Still at least it's contained....

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