By Dan Calabrese ——Bio and Archives--June 25, 2014
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Real personal consumption expenditures increased 1.0 percent in the first quarter, compared with an increase of 3.3 percent in the fourth. Durable goods increased 1.2 percent, compared with an increase of 2.8 percent. Nondurable goods decreased 0.3 percent, in contrast to an increase of 2.9 percent. Services increased 1.5 percent, compared with an increase of 3.5 percent. Real nonresidential fixed investment decreased 1.2 percent in the first quarter, in contrast to an increase of 5.7 percent in the fourth. Nonresidential structures decreased 7.7 percent, compared with a decrease of 1.8 percent. Equipment decreased 2.8 percent, in contrast to an increase of 10.9 percent. Intellectual property products increased 6.3 percent, compared with an increase of 4.0 percent. Real residential fixed investment decreased 4.2 percent, compared with a decrease of 7.9 percent. Real exports of goods and services decreased 8.9 percent in the first quarter, in contrast to an increase of 9.5 percent in the fourth. Real imports of goods and services increased 1.8 percent, compared with an increase of 1.5 percent. Real federal government consumption expenditures and gross investment increased 0.6 percent in the first quarter, in contrast to a decrease of 12.8 percent in the fourth. National defense decreased 2.5 percent, compared with a decrease of 14.4 percent. Nondefense increased 5.9 percent, in contrast to a decrease of 10.0 percent. Real state and local government consumption expenditures and gross investment decreased 1.7 percent; it was unchanged in the fourth quarter. The change in real private inventories subtracted 1.70 percentage points from the first-quarter change in real GDP, after subtracting 0.02 percentage point from the fourth-quarter change. Private businesses increased inventories $45.9 billion in the first quarter, following increases of $111.7 billion in the fourth quarter and $115.7 billion in the third. Real final sales of domestic product -- GDP less change in private inventories -- decreased 1.3 percent in the first quarter, in contrast to an increase of 2.7 percent in the fourth.So basically, everything is going wrong with this economy. By the way, Gross National Product (which includes receipts on income from the rest of the world) was even worse, declining 3.6 percent. The real travesty here is that healthy sustained economic growth is the only way out of the debt fiasco that has exploded since Obama took office. Balancing the budget and starting to make progress of actually paying down debt (without adding even more debt to do so) requires a combination of spending cuts and revenue increases that come from growth, not from higher tax rates. Our fearless leaders in Washington are convinced that more spending will bring about healthy growth. That has been the philosophical conceit of Keynesians for as long as anyone can remember. And it has now given us the craptastic reality of a collapsing GDP more than five years into Obama's grand experiment in activist government. Supposedly Obama is now getting ready to "pivot to the economy" for the umpteenth time, since everything else under his oversight is going haywire too, and he needs something else to talk about. By all means, Mr. President, we can't wait to hear how you explain this one away.
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