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Was Q3 GDP Rigged Just In Time For The Election? Ep. 206

  • Yesterday we finally got the release of the initial estimate for Q4 GDP
  • The Atlanta Fed had originally come out with an estimate of about 3.8 and had steadily reduced their estimate
  • They got down as low as 1.9 before ratcheting it up a couple of times and their estimate was at 2.1 when we got the official release
  • And the number came out at 2.9; not only much higher than Atlanta Fed’s estimate, but much higher than the consensus forecast at 2.5
  • I am very suspicious of this number
  • This is the strongest number in over 2 years and it comes out less than 2 weeks before the election
  • Of course one of Donald Trump’s issues has been the weak GDP growth, which has averaged just 1% for the last 3 quarters
  • All of a sudden it’s 2/9?
  • Does anybody really believe that suddenly the U.S. economy in the fall of 2016 was 3 times as strong as the last 3 quarters?
  • I dont’ think so.  I don’t believe that for a second
  • I do believe that after the election when we get the revisions we will get a downward revision to this number
  • But, even if this number were real; even if it holds up
  • If you average the last 4 quarters to get the entire year, looking back, you’re just below 1.5% for the entire year, which is still extremely weak growth
  • Once you look beneath the surface of this 2.9, it’s very easy to see how they rigged it, to use Donald Trump’s expression
  • Not that it’s some kind of a conspiracy
  • Look at these numbers – there was a 10% spike in exports – this the biggest gain in exports in 3 years
  • It’s not in manufactured products that we’re exporting, where you’ve got some high-paying jobs
  • It was primarily let by a one-time surge in soybean exports