Final 2013 Q4 GDP at 2.6%

posted at 10:41 am on March 27, 2014 by Ed Morrissey

The final look at economic growth in the final quarter of 2013 provided a minor boost to the last estimate, but hardly enough to shake off the stagnant tenor of the last four years of the recovery. The BEA now estimates that gross domestic product (GDP) grew at a 2.6% annualized rate, slightly better than the interim estimate of 2.4% but still significantly below the first advance estimate of 3.2%:

Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 2.6 percent in the fourth quarter of 2013 (that is, from the third quarter to the fourth quarter), according to the “third” estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 4.1 percent.

The GDP estimate released today is based on more complete source data than were available for the “second” estimate issued last month. In the second estimate, the increase in real GDP was 2.4 percent. With this third estimate for the fourth quarter, the general picture of economic growth remains largely the same; personal consumption expenditures (PCE) was larger than previously estimated, while private investment in inventories and in intellectual property products were smaller than previously estimated (see “Revisions” on page 3).

However, real final sales of domestic product did look better than previous estimates. The new figure for Q4 is 2.7% rather than 2.3% in the previous Q4 estimate, which means inventory expansion didn’t play a role in Q4 growth numbers. That’s still a stagnation number, hardly anything from which to expect a big burst of job creation, but it’s better than we saw in the previous two estimates for Q4.

Reuters is a little more optimistic:

The number of Americans filing new claims for unemployment benefits unexpectedly fell last week and touched its lowest level in nearly four months, suggesting the labor market was strengthening.

A separate report showed U.S. economic growth was a bit faster than previously estimated in the fourth quarter, displaying underlying strength that could bolster views that the slowdown in activity early in the year would be temporary.

Initial claims for state unemployment benefits declined 10,000 to a seasonally adjusted 311,000, the lowest level since November, the Labor Department said on Thursday. Claims for the week ended March 15 were revised to show 1,000 more applications received than previously reported. Economists polled by Reuters had forecast first-time applications for jobless benefits rising to 325,000 in the week ended March 22.

At least a little of this is wishcasting. “Displaying underlying strength” is a rather curious claim considering that 2.6% growth after nearly five years of stagnation is hardly considered a strong number — and it’s not only a decrease from the advance estimate, it’s a decrease from the final Q3 GDP number, too (4.1%) and only nominally better than the final year-end GDP growth figure of 1.9%.

As for the weekly jobless claims, the four-week average of 317K does look pretty good from a historical perspective — but that perspective included the context of ~65% civilian participation in the workforce. It’s not entirely correlative in the best of times anyway, but with the participation rate plunging since mid-2010, the correlative value of the series looks in need of recalculation at the least.


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Deduct the FED asset purchases and you have zero or negative growth…

PatriotRider on March 27, 2014 at 10:54 AM

Deduct the FED asset purchases and you have zero or negative growth…

PatriotRider on March 27, 2014 at 10:54 AM

Beat me to it. There are no more tricks left in the bag of tricks. Easy money is about to stop flowing. Devaluation of assets, higher interest rates, and higher prices on things like food all on the horizon?

oldroy on March 27, 2014 at 10:58 AM

Keep printing that money.

forest on March 27, 2014 at 10:58 AM

Don’t be so pessimistic, Ed.

I’m sure things will turn around in Wreckovery Summer VI: Stagnant Boogaloo.

DRayRaven on March 27, 2014 at 10:58 AM

…pivot!

KOOLAID2 on March 27, 2014 at 10:58 AM

It will be interesting to watch the taper continue and the growth head for zero. Or will Yellen “pause for the cause”?

Meremortal on March 27, 2014 at 10:59 AM

Deduct the FED asset purchases and you have zero or negative growth…

PatriotRider on March 27, 2014 at 10:54 AM

I read today in a column by Victor Davis Hanson that the Obama administration also fudges the numbers by including research and development expenses as an investment when they hadn’t been included in the past.

Media: zzzzz.

BuckeyeSam on March 27, 2014 at 10:59 AM

That Reuters piece has been the same since Chicago Jesus got porkulus pushed through. “Good times are just around the corner. Obama has set us up to economic Nirvana, just wait.”

jukin3 on March 27, 2014 at 11:08 AM

Gold, silver, ammo and food…tangible assets…this financial fantasy will not last forever…

PatriotRider on March 27, 2014 at 11:11 AM

Deduct the FED asset purchases and you have zero or negative growth…
 
PatriotRider on March 27, 2014 at 10:54 AM

 
Beat me to it. There are no more tricks left in the bag of tricks. Easy money is about to stop flowing. Devaluation of assets, higher interest rates, and higher prices on things like food all on the horizon?
 
oldroy on March 27, 2014 at 10:58 AM

 
All according to plan. (R)s take Congress in 2014 just as the bottom is timed to fall out, and guess who gets blamed?
 
Classic Obama. As another poster said, rotten president, great politician.

rogerb on March 27, 2014 at 11:14 AM

Minus inflation and well, as if they really tell you the truth about inflation.

astonerii on March 27, 2014 at 11:16 AM

Obama’s seeds appear to be withering.

faraway on March 27, 2014 at 11:18 AM

BLS: Here are our latest numbers.

Me:

BKeyser on March 27, 2014 at 11:19 AM

A real leader can get 5% GDP just by being a leader.

A complete moron, utterly and completely deficient in mental capacity, drooling spittle and in need of a diaper change could get 2.6% GDP.

Oh, wait….

Turtle317 on March 27, 2014 at 11:21 AM

Untruthful and Untrustworthy Government

Does the government release an accurate report on quarterly Gross Domestic Product growth — another vital barometer of how the economy is doing? Maybe not. Last year, the Bureau of Economic Analysis for the first time factored research and development costs of businesses into statistics on investment growth.

Suddenly, a cost became proof of business output and thus was added into the business-investment contribution to GDP. That new accounting gimmick may have added hundreds of billions of dollars into the equation of figuring GDP growth last year alone. Not surprisingly, the government reported unexpectedly high 2.8 percent GDP growth after the changes.

Personally I do not trust any numbers coming from this administration.

Kaffa on March 27, 2014 at 11:33 AM

Gold, silver, ammo and food…tangible assets…this financial fantasy will not last forever…

PatriotRider on March 27, 2014 at 11:11 AM

In a Mad Max world, carrying ammo and food will be the priority.

Gold and silver will weigh too much to tote.

Think diamonds.

Carnac on March 27, 2014 at 11:58 AM

America, you are a one stupid nation, sadly.

Schadenfreude on March 27, 2014 at 11:58 AM

Conservatives always struggle to understand simple economic principles, so let me break it down and simplify this for you.

“Higher unemployment” is not the menace you people try to make it out to be. People receiving welfare aren’t burdened with work. Americans who don’t need to work have free time to buy products. Consumers who buy products produce profits for companies, which results in more tax dollars for the government, which produces more substantial welfare payments and even more citizens relieved of labor necessities. Which enables even more spending….

Eventually, thanks to President Obama’s ingenious efforts and leadership, no American will have to be concerned with working and we will finally achieve true economic equality for all.

Frank Lib on March 27, 2014 at 12:20 PM

Eventually, thanks to President Obama’s ingenious efforts and leadership, no American will have to be concerned with working and we will finally achieve true economic equality for all.

Frank Lib on March 27, 2014 at 12:20 PM

LOL… I missed that in my MBA program. Good one.

Kaffa on March 27, 2014 at 12:45 PM

Conservatives always struggle to understand simple economic principles, so let me break it down and simplify this for you.

Oh, this ought to be good.

“Higher unemployment” is not the menace you people try to make it out to be. People receiving welfare aren’t burdened with work. Americans who don’t need to work have free time to buy products. Consumers who buy products produce profits for companies, which results in more tax dollars for the government, which produces more substantial welfare payments and even more citizens relieved of labor necessities. Which enables even more spending….

Eventually, thanks to President Obama’s ingenious efforts and leadership, no American will have to be concerned with working and we will finally achieve true economic equality for all.

Frank Lib on March 27, 2014 at 12:20 PM

Money for nothing is the number-one sign of a con job, for very good reason; paying people to do nothing results in nothing being produced.

And when nothing is produced, you have nothing to sell.

And when you have nothing to sell, you have no profits.

And when you have no profits, you have no taxes.

Granted, you’re just repeating what economic moron Barack Choom Obama told you, so I suppose we can’t really presume you’re at fault for your complete and total ignorance.

northdallasthirty on March 27, 2014 at 4:23 PM

Where are the libtards to tell us that the fundamentals are strong and STEVE JOBS!!!111111

Murphy9 on March 27, 2014 at 6:58 PM