A Look Behind The Numbers

by Chicago Bear (Stool Pigeons Wire- 10/30/09) Here’s what they said in the GDP report:
The improvement in real GDP in the third quarter primarily reflected upturns in personal consumption, inventory investment, exports, and residential fixed investment and a smaller decrease in nonresidential fixed investment that were partly offset by rise in imports, a downturn in state and local government spending, and a deceleration in federal government spending.

Indeed, some of the component numbers were encouraging. PCEs rose an annualized 3.4 percent, led by durables with a 22.3 percent jump.
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Cash for clunkers did add substantially to third quarter growth as motor vehicle output added 1.66 percentage points to the third-quarter change in real GDP after adding 0.19 percentage point to the second-quarter change.

So, as of yesterday, cash for clunkers was so successful it add 1.66% to the GDP. Ok, let’s see the numbers in Durable Goods leading up to yesterday.

10/28/09 Durable Goods
According to the latest durable goods report for September, manufacturing is still on track for a moderate recovery. Durable goods orders in rebounded 1.0 percent, after a 2.6 percent drop in August and a 4.8 percent surge in July.
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The rebound in new orders was led by machinery which surged a monthly 7.9 percent, followed by a 1.1 percent rebound in transportation equipment. Transportation was boosted by a rebound in defense aircraft, up 12.5 percent, as motor vehicles and nondefense aircraft slipped 0.1 percent and 2.1 percent, respectively.

Nope, no cash for clunkers stimulus in September. Motor Vehicles acutally fell. How about August?

9/25/09 Durable Goods
Durable goods orders in August dropped 2.4, after a revised 4.8 percent surge in July. The August number came in far below the consensus forecast for a 1.0 percent gain. Excluding the transportation component, new durables orders were unchanged, following an upwardly revised 0.9 percent boost in July.
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The drop in new orders was led by transportation, which fell 9.3 percent. Within transportation, nondefense aircraft fell 42.2 percent, defense aircraft declined 10.6 percent, and motor vehicles rose 0.4 percent. Otherwise, new orders were mixed.

So, there was only a .4% increase in motor vehicles = noted. How about July?

8/26/09 Durable Goods
Aircraft orders and auto orders made for a surge in the manufacturing sector during July, another key factor suggesting that the recession has already come to an end. New orders for durable goods shot up 4.9 percent. Excluding an 18.4 percent surge in transportation, orders still rose a strong 0.8 percent. Civilian aircraft orders rose more than six fold while motor vehicle orders, likely boosted by cash for clunkers, rose 0.9 percent.

So, in the last quarter, motor vehicles were down .1%, up .4% and up .9%. How does that add up to 1.7% of the GDP? It’s just not there. If anything, aircraft and machinery had a larger impact. Still, these numbers don’t even come close to justifying the “22.3%” jump in durables reported in the GDP.

This is all a bunch of garbage. Cash for clunkers, by the durable goods orders, was only a moderate success at best. GDP, by the durable goods orders, is a blatant manipulation. Slimeballs #1 are complete morons with no clue about what they are talking about. I’d really love to take that smirk off of SB#1’s face the old fashioned way!

For reference, here’s your recovery, compliments of Durable Goods: