When the initial GDP growth numbers came out at the end of April, the U.S. had achieved a barely positive result of just .2% for the first quarter of 2015. But on May 29, the final revisions were announced and the market’s worst nightmare unfolded as revised GDP for Q1 was actually negative, and fell to -.7%.
Two consecutive quarters of negative growth are the determining factor for a recession, and with corporate revenues falling, and declines in consumer spending being the catalysts for the revised growth numbers, the probability that the U.S. is already in a slump is extremely likely, considering that the largest spending component over the past six months has been in the arena of healthcare premiums.
And you thought the preliminary 0.2% Q1 GDP print from last month was bad. Moments ago, just as we warned, the BEA released its latest, first, revision of Q1 GDP (pre second-seasonal adjustments of course), and we just got confirmation that for the third time in the past four years, the US economy suffered a quarterly contraction, with the Q1 GDP revised drastically from a 0.2% growth to a drop of -0.7%: the worst print since snow struck, so very unexpectedly, last winter. – Zerohedge
What had kept ‘official’ numbers from validating the country is already in an economic recession were the enormous oil revenues received from intense fracking throughout the West and Southwest regions over the past two years. But as the price of oil began to drop in the third quarter of last year, GDP began to decline in the fourth quarter and has carried over well into the first parts of 2015.
Contrary to the mainstream media’s propaganda that is trying to spin the fake recovery into something it never was, companies have not been increasing their revenues at all over the past three years as their ‘earnings’ have been based primarily on skewed ES ratios from stock buy backs, and not increased production. And since 80% of all new jobs created have been part time, and near minimum wage, consumers have been unable to spend outside the realm of necessities and this has also increased the decline in domestic growth throughout the economy.
Last week, the government announced they were once again changing to the growth model to include a doubling of the seasonally adjusted numbers as a means to raise GDP through the use of pixie dust and propaganda. Seasonally adjusted numbers have always been a complete scam as they are based solely on hypothetical computations and not true data gathered from actual sales and company surveys. And with the Obama administration doing everything possible to keep the official numbers from validating America is in a full blown recession, all one has to do to remove the blinders is look in your own neighborhoods and see how many retail stores are closing their doors, and how many companies are laying off workers.
Kenneth Schortgen Jr is a writer for Secretsofthefed.com, Examiner.com, Roguemoney.net, and To the Death Media, and hosts the popular web blog, The Daily Economist. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.