As we reported earlier, while on the surface the headline revised Q3 GDP number was a stunner coming at 3.6%, the reality is that more than 100% of the growth from the initial estimate came from a revised estimate of how many private Inventories were stockpiled in the quarter. The reality was that of the $230 billion in total increase in SAAR GDP, $146 billion of this, or over 63%, was due to inventory stockpiling.
So how does inventory hoarding - that most hollow of "growth" components as it relies on future purchases by a consumer who has increasingly less purchasing power - look like historically? The chart below shows the quarterly change in the revised GDP series broken down by Inventory (yellow) and all other non-Inventory components comprising GDP (blue).
© BEA, Zero Hedge
But where the scramble to accumulate inventory in hopes that it will be sold, profitably, sooner or later to buyers either domestic or foreign, is seen most vividly, is in the data from the past 4 quarters, or the trailing year starting in Q3 2012 and ending with the just released revised Q3 2013 number.
The result is that of the $534 billion rise in nominal GDP in the past year, a whopping 56% of this is due to nothing else but inventory hoarding.
© BEA, Zero Hedge
The problem with inventory hoarding, however, is that at some point it will have to be "unhoarded." Which is why expect many downward revisions to future GDP as this inventory overhang has to be destocked.
Comment: The definitions of many government macro economic indicators have changed over the years for the purpose of perception management. For instance, John Williams of
Shadowstats estimates the current annualized rate of inflation to be over 9% according to government methodology used prior to 1980.
as other posts at ZeroHedge point out, 41% of the newly employed are govt workers... is that a fudging of the numbers post-Shutdown? Hard to tell just yet as the ever increasing size of the revisions every month make the entire economic analysis a farce. Another recent post at ZH points out that as the working age population increase, the number working decreased which allows the overall unemployment figure fall to 7%, but that if you added it all in, would be near 11.5%. Seems the Fed is merely marking time until the 'rug gets pulled out' in a few weeks...
good thing Mother Nature isn't too far behind... but at least for now, BitCoin enthusiasts can join the party at a lower entry pricepoint. That should count for something, right?
Hey, we gotta get our laughs someplace.