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Here Is The “Growth” – Inventory Hoarding Accounts For Nearly 60% Of GDP Increase In Past Year | Zero Hedge
Here Is The “Growth” – Inventory Hoarding Accounts For Nearly 60% Of GDP Increase In Past Year | Zero Hedge.
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).
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.
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.
Canada’s trade deficit shrinks to C$469 million in June | Business | Reuters
Canada’s trade deficit shrinks to C$469 million in June | Business | Reuters.
- Loonie moves higher after trade deficit shrinks in Canada, even more in U.S. (vancouversun.com)
- Canada’s trade deficit shrinks in June, but exporters still struggling (business.financialpost.com)
- U.S. Trade Deficit Narrows Helped by Drop in Oil Imports (dailyfinance.com)
- Trade Deficit Shrinks to 4-year Low (businessinsider.com)
US economy growth rate misses expectations – Americas – Al Jazeera English
US economy growth rate misses expectations – Americas – Al Jazeera English.
- After near-stall, economy picks up (miamiherald.com)
- BREAKING NEWS: US economy grows less than expected in first quarter (foxbusiness.com)
- New Firms are Generating and Holding onto Substantially Fewer Jobs in the U.S.; Kauffman Foundation Study Finds that U.S. Jobs Problem Pre-dates Great Recession (kauffman.org)
- Latest GDP Report Shows U.S. Economy Still Waiting for Liftoff – Bloomberg (bloomberg.com)
- The Cannibalization of Entrepreneurship in America: Expanding Financial Sector Depleting Pool of Potential High-Growth Company Founders (kauffman.org)
- The incredible stagnant U.S. economy (washingtonpost.com)
- US economic growth in middle of global pack (mysanantonio.com)