4th Quarter GDP Report Shows Growth Slowing

economic diceEarlier today, the markets received word that 4th quarter GDP had been revised down from 2.6% to 2.2%. The 4th quarter GDP report was previously thought to be much higher (due to a strong 3rd quarter) before coming down over the past 2 months. The revised 4th quarter GDP number continues to show a stagnant economy, with slowing growth. The politicians like to take a single number for a quarter and annualize it—that’s how they come up with something like 5% (which was the revised 3rd quarter number). But that doesn’t mean the annual rate actually achieves that.

Take a look at this list of annual GDP by year that Jim Rickards tweeted earlier today:

Annual GDP by Year:

2007      1.8%

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2008     -0.3%

2009     -2.8%

2010      2.5%

2011      1.6%

2012      2.3%

2013      2.2%

2014      2.4%

 

We don’t always get the straight story as there is too much Wall Street cheerleading, continuously touting the bright side of how the economy is doing. The report is more of a macro indicator, as the markets are little effected thus far by the report: stocks and bonds were both trading near par at lunchtime with the S&P 500 up 1.5 points and the 10 year and 30 year treasury bond yields at par and up 0.012 respectively.

The underlying problem remains: countries around the world are sitting on a lot of debt and their economies are slowing.

     Follow Jeff on Twitter:  @JeffVoudrie

Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.