GDP Falls by 2.9% in Q1 14

Largest revision in 38 years. Went from 1% growth to -2.9%. That is a huge adjustment. Worst quarter in 5 years. One more negative quarter and it's officially another recession. The July 30 Q2 estimate will be much watched.

While it is likely due to some temporary factors like weather and not systemic issues, it still doesn't bode well for anyone. Although most forecasters are predicting a continuation of growth for 2014 many including the Federal Reserve have reduced their forecasts.

https://www.bea.gov/newsreleases/national/gdp/2014/gdp1q14_3rd.htm

Keep an eye on the price of gasoline at the pump this summer. Should those prices continue to rise, Q3 or Q4 could also see unexpected negative growth as consumers and businesses cut back on other spending to pay for the oil that fuels our economy. We could also see some of the money in equities shift over to oil commodities like we saw in the historic oil price run up of 2008. Of course I'm just speculating.

Oil is up qbout 5% in the last month alone, now at $106+ per barrell

Meat and fish price increases have been in excess of 6% this year. Wheat is also up. For some reason the govt does not include food infaltion as part of it's core inflation rate.

The theory is that food and energy products see large, historical, short term price swings that are often due to temporary speculation or temporary supply disruptions and do not represent a general rise in prices due to 'too many dollars' in the economy. Therefore, to get a better picture of the underlying inflationary trend, food and energy costs are excluded. At least that's the theory.

And to expand on this a little, the huge run up in oil prices in 2008 was naturally followed by a historic fall in oil prices. This was mostly caused by speculation in the oil markets which created a temporary asset bubble that subsequently 'popped'. It was not part of a general rise in prices.

If energy had been part of the core CPI in 2008 it might have distorted that statistic and perhaps spurred the Federal Reserve to take action against a general rise in prices which was really non-existent. This monetary tightening would have happened just as the economy was headed to the throes of recession, which would have been the exact opposite of the generally accepted monetary policy. Of course there are those who might argue that the Oil Price Bubble of 2008 had it's roots in unsound monetary policy to begin with, so there you go.

I can hardly wait for the Obama administration to respond with more of their reassuring rhetoric .

It'll make me feel better when Obama blames the GOP for the downturn in the economy, and then reminds us about "Hope and Change"......followed quickly about his push on minimum wage.

Always nice to be able to rely on one of the alanleroys to report quarterly GDP changes here at lasvegasadvisor.com.

Like clockwork, every three months, without fail

Where do you get this information from? As BEA reported today, the advance estimate was for 0.1% growth, not 1.0% growth as you claim. Last month, the second estimate was for -1.0% growth, and now the final estimate of -2.9% growth.

Why are you claiming there was a prior estimate of 1.0% growth?

And the stock market goes up?????? Israel bombs Syria, stock market goes up??????Iraq in chaos, stock market goes up???? what next, earnings plummet, P.E. ratios go to 100.... sorry folks something is not right, stock market must be all fake now!

A. Unfortunately I used a not too reliable source for that
"Rather than the 1 percent growth the Commerce Department reported last month, gross domestic product fell by 2.9 percent, the worst performance in five years. That brings total growth down by three percent since the government first reported its estimates in April. There hasn't been a larger difference between the second and third revised estimates in 38 years, the Commerce Department said on Wednesday. "

https://www.nbcnews.com/business/economy/u-s-economy-contracted-almost-3-percent-first-quarter-n140336

B. The reason I posted this statistic is not because I post it quarterly, but because I thought such a surprisingly large drop off in GDP growth was worthy of discussion. Don't you think it is?

Does it really make any difference how often this statistic is posted? The truth of the matter is that the GDP "growth" is an Obama administration lie. Just more"change we can believe in".

The Commerce Department did NOT report 1 percent growth last month. It reported a 1.0% percent contraction. You're off by 2.0%.

See my link, above, to the Commerce Department's report.