As expected – well, expected by you, me and everyone non-liberal out there…which means the financial “experts” and the MSM were caught flat footed. From Reuters:
The economy grew slower than initially estimated in the fourth quarter as government spending contracted more sharply and consumer spending was less robust, a government report showed on Friday.
Gross domestic product grew at annualized rate of 2.8 percent, the Commerce Department said in its second estimate, marking a downward revision from its initial 3.2 percent estimate.
Economists had expected GDP growth, which measures total goods and services output within U.S. borders, to be revised up to a 3.3 percent pace…
What this means is that the “experts” were half a percentage point off (expected 3.3%, actual 2.8%). And here’s the really bad news – there is one more revision to go before we get the actual 4th quarter GDP number. What this means is that it could be revised even lower. I expect it will be – I know there were lots of stories of a booming Christmas shopping season, but I noted early on that they were only getting shoppers in to the stores by steep discounts and people were sticking to the “loss leaders” rather than going on shopping sprees. I fully expected 4th quarter GDP numbers to be lousy.
I don’t know what the initial 1st quarter 2011 numbers will look like when announced in April, but you can bet they’ll be pumped up as much as possible. I have little faith in any initial number put out by government agencies these days. This is primarily because of the new claims for unemployment data – each week we get a number and then the next week we get a revised number; over and over again in the past two years it has been an upward revision. If they are fudging the unemployment numbers then it is just as likely they are fudging all numbers…until the hard data arrives.
UPDATE: Seems that a lot of people are getting that sinking feeling.
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