{"id":30208,"date":"2018-01-26T12:13:29","date_gmt":"2018-01-26T17:13:29","guid":{"rendered":"http:\/\/olduvai.ca\/?p=30208"},"modified":"2018-01-26T12:13:29","modified_gmt":"2018-01-26T17:13:29","slug":"this-is-1987-some-haunting-math-on-todays-gdp-number-from-david-rosenberg","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=30208","title":{"rendered":"“This Is 1987”: Some “Haunting Math” On Today’s GDP Number From David Rosenberg"},"content":{"rendered":"
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“This Is 1987”: Some “Haunting Math” On Today’s GDP Number From David Rosenberg<\/a><\/span><\/h3>\n<\/div>\n
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When discussing today’s unexpectedly weak Q4 GDP print<\/a>, which came in at 2.6%, far below consensus and whisper estimates in the 3%+ range, and certainly both the Atlanta and NY Fed estimates, we pointed out the silver lining: personal spending and final sales, which surged 4.6% Q\/Q (vs 2.2% in Q3), although even this number had a major caveat: “as we discussed previously<\/a>, much of it was the result of a surge in credit card-funded spending while the personal savings rate dropped to levels last seen during the financial crisis<\/strong>.”<\/p>\n

Indeed, recall the stunning Gluskin Sheff chart we presented a month ago<\/a>, which showed that 13-week annualized credit card balances in the U.S. had gone “completely vertical” in the last few months of 2017 which we said “should make for some great Christmas.”<\/p>\n

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Meanwhile, even more troubling was the ongoing collapse in the US personal savings rate, which last month tumbled <\/a>to the lowest level since the financial crisis as US consumers drained what little was left of their savings to splurge on holiday purchases.<\/p>\n

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And while we highlighted and qualified two trends as key contributors to the spending surge in Q4 personal spending, Gluskin Sheff’s David Rosenberg – who is once again firmly in the bearish camp – did one better and quantified <\/em>the impact. Not one to mince words, the former Merrill chief economist described what is going on as “The Twilight Zone Economy” for the following reason:<\/p>\n

how many times in the past have we seen a 2.6% savings rate coincide with a 4.1% jobless rate? How about never…huge ETF flows driving equities higher, but these metrics are screaming ‘late cycle’.<\/strong><\/p><\/blockquote>\n

He then proceeded to give “some haunting math<\/strong>” from the GDP number: “The savings rate fell from 3.3% to 2.6%. <\/u>If it had stayed the same, real PCE would have been 0.8% (annualized) instead of 3.8% and GDP would have been 0.6% instead of 2.6%<\/u>.<\/strong>”<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

“This Is 1987”: Some “Haunting Math” On Today’s GDP Number From David Rosenberg When discussing today’s unexpectedly weak Q4 GDP print, which came in at 2.6%, far below consensus and whisper estimates in the 3%+ range, and certainly both the Atlanta and NY Fed estimates, we pointed out the silver lining: personal spending and final […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[10067,11150,303,11151,2162,3650,2212,4318],"class_list":["post-30208","post","type-post","status-publish","format-standard","hentry","category-economics","tag-credit-card-debt","tag-david-rosenberg","tag-fed","tag-gluskin-sheff","tag-savings-rate","tag-us-federal-reserve","tag-us-gdp","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/30208","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=30208"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/30208\/revisions"}],"predecessor-version":[{"id":30209,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/30208\/revisions\/30209"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=30208"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=30208"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=30208"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}