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Category Archives: BEA overestimates GDP

Fake economic news from the BEA

Next week will see the 2nd estimate of Q4 GDP growth from the BEA (branch of the Commerce Department). You should not place much weight in the report.  Here’s an update on BEA overstating real GDP growth.  This chart shows BEA 1st, 2nd, 3rd, and current estimates (years after the fact) for real GDP growth in Q3 of each year from 2000 through 2016. […] Read the rest of this entry »

BEA GDP not fudged (this time)

All be damned if the BEA posted a GDP growth estimate actually close to what it likely was –as opposed to overestimating it. Wonders never cease.  The BEA’s first guess at Q4 real GDP growth was +0.7% –matching the Atlanta Fed’s realtime estimate.  0.7% remains a very weak print. I have been expecting the BEA to post a 1.0 to 1.2% gain today, then […] Read the rest of this entry »

BEA GDP: repeated lies from their own data

Since this morning has the BEA providing its 3rd estimate of Q3 real GDP growth, I thought it would be time again to shed some light on what the BEA has been doing for the past 15 years.  The BEA has been over-estimating real GDP growth by an average of 1.16% on their 3rd estimates of Q3 real GDP growth. This is based on their own […] Read the rest of this entry »

BEA GDP fudged higher

As expected, the BEA’s 2nd kick at Q2 GDP was pushed higher. Considerably higher — to +3.7%.  Their advance estimate (1st estimate) was +2.3%. Thank you inventory building. This inventory build overhang is now huge and will make it tough to see much GDP growth in Q3 & Q4 (but let’s not worry about that now…) So is good news good news (for the […] Read the rest of this entry »

The difference between December 2007 and November 2008

The last U.S. recession is understood to have initiated in December 2007. The first BEA report showing a contraction in GDP was on November 25th 2008 — for all intents a year after the fact. By the time the BEA’s November 25 2008 GDP report came out, the S&P500 had already dropped from 1565 in October 2007 to 800. Food for thought when you […] Read the rest of this entry »

2014 looks like 2007: BEA and ECRI

Has anyone else noticed the ECRI WLI has dropped to -1.2%? Here’s what the ECRI WLI did in the final 6 months of 2007. For those that don’t recall, the U.S. economy entered recession in December 2007, and the SPX peaked in October (less than 1% higher than its previous peak). July 2007. ECRI WLI in the 5s October 2007. WLI approx -0.5 December […] Read the rest of this entry »

Q3 GDP: perfect

The BEA released its first kick at the can in providing an estimate of real GDP growth in Q3.  Unsurprisingly, their estimate was 3.5% — surpassing consensus estimates of 3%.  Nice.  They’ll lower this 3.5% estimate to something in the 2s a few years from now, but for the next few months, the BEA will likely raise the estimate — especially the 3rd estimate. […] Read the rest of this entry »

ECRI WLI rolling over

ECRI’s WLI has been slowing since reaching 5.0 in May (suggesting a 5% real GDP growth rate). This morning ECRI released their latest data (covers up to last week). The WLI was -0.1%.  It’s too early to call a recession, but the odds of the U.S. entering recession in Q1 are rising. Typically the S&P500 peaks a few months prior to a recession starting. […] Read the rest of this entry »

BEA follow up: overstating growth

  People like charts…. BEA Q3 GDP data over the past 14 years: In years where there was no recession: The current estimate (years later) was an average of 0.52% lower than their 1st. The current estimate (years later) was an average of 1.05% lower than their 3rd. The 3rd estimate was off by more, and more overstated.  1.05% may not seem like much, […] Read the rest of this entry »

BEA Q2 GDP 3rd try. Who cares?

The BEA announced their 3rd estimate of Q2 GDP at: 4.6%  – right at consensus.  The previous estimate was 4.2%. The BEA maintains its 3rd estimate is based on a more complete data set and therefore implies this is the one you should put your faith in (vs their 1st and 2nd estimates). I have not studied BEA Q2 GDP estimates -but I’m going […] Read the rest of this entry »