Key GDP Takeaway: Ever Weakening Real Final Demand

What’s the most important metric in GDP report on Friday? Caroline Baum tweets that it’s private final demand, the slowest in three years, excluding the first quarter of 2016.

Author:: MishTalk
Publish date:: Oct 30, 2016

What’s the most important metric in GDP report on Friday? Caroline Baum tweets that it’s private final demand, the slowest in three years, excluding the first quarter of 2016.

Ever Weakening Real Final Demand

A slightly different metric better highlights ever-weakening demand.

Real Final Sales of Domestic Product % Change From Year Ago

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I downloaded that data into an Excel spreadsheet capturing the yearly high for each year since 1950.

Real Final Sales of Domestic Product – Yearly Highs Since 1950

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This is an ominous looking trend.

Real final sales of domestic product compared to the previous year trend lower as deficit spending and Fed printing rise.

Mike “Mish” Shedlock

Real GDP rose at a seasonally adjusted annualized rate (SAAR) if 2.9% according to the BEA’s Advance Estimate.

First quarter real GDP came in at 0.7% vs an Econoday consensus estimate of 1.1%. Consumer spending was the weakest since the 4th quarter of 2009.

The advance (first) estimate of first-quarter GDP is published tomorrow. The GDPNow final estimate is 2.0%, Nowcast 2.9%

On Friday, April 28, the BEA will release its preliminary estimate for first quarter GDP.

In the third and final estimate of first quarter GDP, the BEA upped its assessment of GDP from 1.2% to 1.4%. The Econoday consensus expected no change.

GDP came in ahead of the Econoday consensus estimate of 2.0%. Spending on goods declined.

Here are a few interesting charts of M1 money supply vs. Real GDP/10 from reader WendyBG.

The initial estimate of 4th-Quarter GDP was 2.1%, about where analysts expected. but the details are another matter.

The BEA’s third (final) estimate of second-quarter GDP is due Thursday. The Econoday consensus is the BEA will up the reading to 3.1% from 3.0%.