Chain Deflator & GDP Q4, Little Shop of Horrors
Initial Claims -10K to 302K vs prior 312K. Neither here not there.
Chain Deflator Q4 05: +3.7% vs prior +4.2%, a decrease sounds good eh! Not!
Ex food & energy +3.2% vs prior +2.5%, the highest YOY change since 1992. Structures +20.3% vs prior +16.5%, stagflation is screaming.
Don't worry, things get worse in our little shop of horrors. GDP Q4 +1.7% vs est +1.1% vs prior 4.1%. Sounds good vs est. right? Wrong!!
Inside the number: GDP declined primarily due to a drop off in PCE personal consumption expenditures and corporate business investment.
Worse yet, the upward revision to 1.7 was caused by an inventory build of $38B and not by final sales which were NEGATIVE.
Bad news, PCE percentage contribution dropped to +0.62 from prior +2.85%. Consumer Spending +0.9% vs prior +4.1%, the weakest growth in 11 years.
Worse news, Final Sales -0.2% vs prior +4.6%. Durable Goods -16.6% the largest drop in 19 years.
Good news for corporations that is, profits +21% the fastest in 3 years. Before tax corporate profits +14.4% or 11.6% of GDP, the highest share of GDP since Q2 1966.
More bad news for John Q. Public, no flash in corp excess cash, contributing to the deceleration, business investment +4.5% vs prior +8.5%, the lowest in 3 years.
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Chain Deflator Q4 05: +3.7% vs prior +4.2%, a decrease sounds good eh! Not!
Ex food & energy +3.2% vs prior +2.5%, the highest YOY change since 1992. Structures +20.3% vs prior +16.5%, stagflation is screaming.
Don't worry, things get worse in our little shop of horrors. GDP Q4 +1.7% vs est +1.1% vs prior 4.1%. Sounds good vs est. right? Wrong!!
Inside the number: GDP declined primarily due to a drop off in PCE personal consumption expenditures and corporate business investment.
Worse yet, the upward revision to 1.7 was caused by an inventory build of $38B and not by final sales which were NEGATIVE.
Bad news, PCE percentage contribution dropped to +0.62 from prior +2.85%. Consumer Spending +0.9% vs prior +4.1%, the weakest growth in 11 years.
Worse news, Final Sales -0.2% vs prior +4.6%. Durable Goods -16.6% the largest drop in 19 years.
Good news for corporations that is, profits +21% the fastest in 3 years. Before tax corporate profits +14.4% or 11.6% of GDP, the highest share of GDP since Q2 1966.
More bad news for John Q. Public, no flash in corp excess cash, contributing to the deceleration, business investment +4.5% vs prior +8.5%, the lowest in 3 years.
Full Report
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