The topline of a third-quarter GDP at +2.6% looks good [DATA HERE]. However, a look into the numbers shows alarm. The domestic U.S. economy, as measured by Main Street creating goods and services for domestic consumption, contracted in the third quarter.
The Gross Domestic Product (GDP) calculation is a valuation of all goods and services created within the economy, minus the value of goods and services imported. However, even a cursory look under the topline number shows how the import/export dynamic creates the illusion of economic growth.
In the third quarter we exported hundreds of billions worth of energy products, including massive liquified natural gas (LNG) sales to Europe, and oil sales to the global market from the strategic petroleum reserve. We also sold billions in weapons to Europe. Those sales are calculated as exports, lifting the GDP number (Table 1). At the same time, imports of durable goods into the United States collapsed; meaning less was deducted from the GDP. The net import/export impact on the GDP dynamic was +2.77% (Table 2).
Meaning the third-quarter import/export dynamic alone contributed 2.7% growth to the percentage of change for the prior period. However, the total GDP only rose 2.6%, because the actual economic value created domestically got smaller. We made less internally, sold less internally and consumers purchased less internally.
You can see the import/export dynamic in whole dollars within Table 1:
TABLE 1 – We exported 17.2% more goods in the third quarter than in the second quarter (that’s mostly energy sales and food sales to the global market). We imported 8.7% less goods in the third quarter than the second quarter. That’s mostly the drop in companies ordering products from overseas for sales in the United States. Companies imported less because inventories climbed as consumers stopped purchasing durable goods and non-essentials.
Table – 2 (modified for clarity) shows us the impact or contribution from the import/export dynamic:
In Table-2 you can see the net impact of higher exports and lower imports lifted the GDP by 2.77%. However, the total GDP only gained 2.6% due to the other dynamics inside the economy slowing down. The import/export dynamic alone was enough to explain the entire gain in Q3 GDP and is a function of US support of the European war economy as the US exports record number of commodities (oil and gas), as well as Joe Biden’s massive multi-billion weapon sales to Europe.
The Biden administration will use the +2.6% GDP number to claim the U.S. “recession” never existed, despite two previously negative quarters. However, while technically the talking point may be true, the domestic U.S. economy (Main Street) is making less stuff and consumers are buying less stuff.
The savings rate is also declining. BLS: “Personal saving was $626.1 billion in the third quarter, compared with $629.0 billion in the second quarter. The personal saving rate—personal saving as a percentage of disposable personal income—was 3.3 percent in the third quarter, compared with 3.4 percent in the second quarter.” American households are saving less because essential purchases like housing, rent, food, fuel and energy, are costing much more.
When households evaluate their checkbooks, a Biden administration claim of a growing economy falls flat – because the only part of the economy that is growing is the part that fuels the energy needs of Europe. Main Street USA is suffering through the massive inflation that Joe Biden has created, and purchases of anything other than necessities have come to a near halt.
More pain at the grocery store today.
Stock market is artificially propped up.
After the election:
Hard Times Coming!
Exactly – I totally expect that the GDP number will be revised down next month, once the election is over. They pull this crap all the time, fudging the data to suit their nefarious purposes.
The government claims these numbers are Inflation Adjusted. However, if you use a number smaller than the actual inflation rate, it will make your GDP look positive when it is negative.
“I totally expect that the GDP number will be revised down next month, once the election is over”
“In the third quarter we exported hundreds of billions worth of energy products, including massive liquified natural gas (LNG) sales to Europe, and oil sales to the global market from the strategic petroleum reserve”
Try this on for size:
INTENTIONAL
… the outsize energy exports, that is
Recall the recently trumpeted “when Republicans take over, they’ll crash the economy”
So couple of bright guys in the BoBama administration say:
“We had 2 quarters of negative GDP already this year (recession but everyone pretends not)
“What can we do to hold off recession for just ONE MORE QUARTER?”
“I know — EXPORTS!”
So what’s the one thing they have their hands on that they can use?
Strategic Petroleum Reserve
So they pump the energy export pedal and presto! Positive GDP growth until Repubs get in and get the blame for the recession … they’ll probably crash the stock market as well, right? Plan accordingly
Just like last January or December
“What can we do to keep GDP positive?”
Ans: delay reporting of the imports component in GDP so it doesn’t hit until the next month
Like I said: “INTENTIONAL”
Meanwhile NASDAQ down another 2% today, almost 40% down from last year
actually….worse: after the bell it tanked another 400 points (another 2%) after Amazon announced Q3 performance…which was just so-so.
But at 4:30 ET, Apple announced and the NASDAQ rose 200. So, net loss of 200 after the bell.
The tech “giants” could become the next dot.com busts…. especially Meta which is led by an imbecile.
In the old SU every production target of the 5-year-plan was either fulfilled or overfulfilled, no surprises here…
A “collective farm” in Russia “produced” 10,000 pages of reports.
The worker got up at the crack of 10, hauled fertilizer and dumped it in the ditch, went home and filed papers and was drinking Vodka at 12 noon.
The smucks that picked Joe really knew what they were doing. When selling a lie, It’s best the liar actually believes it. The George Castanza principle.
IMHO, Biden will keep draining the SPR long after the mid-term election. He will need this to show that the economy is on track. This approach has so many problems, which I will not even try to explain here!
Don’t you mean SPQR? The Biden admin love draining romans… (hint; stop being a lazy F and just write what you’re thinking)
I do not know what mean by draining romans. Also, pretty rude to call me a lazy F.
He’s never read gramma’s rules.
All Hype: Perhaps I can help to explain and de-escalate.
I believe that the commenter was perturbed by your use of an acronym (SPR, for Strategic Petroleum Reserve), rather than spelling out the words. Also, SPQR stands for “Senatus Populusque Romanus,” which is Latin for “Senators and People of Rome.”
Sometimes, commenters get a little hot under the collar. I don’t think it’s personal.
For some CTH readers, use of acronyms is a hot button.
i disagree if Joe and the Dems win, they will cease draining the SPR…in order to foster their green new deal.
will cease draining so that export component is no longer in the GDP calculation, hence Republicans get the blame for a lower GDP next quarter
“See? We’ve been telling you Republicans would crash the economy if they got elected”
Wally World is starting to put things on the shelves, for Christmas…coffeemakers, keurigs (in redesigned packaging boxes) were the big thing I noticed…also pot holders, the cutesy fabric types…seem a little smaller, too. Shrinkflation finds all sorts of ways into our homes. Stingy scottish that I claim…I am using potholders from 1980! And they are in pretty good shape!
Funny you say that. Just this weekend I got criticized for having bath towels that are almost 40 years old. My reply, “They still work, don’t they?”
Great Response! Make do and use what you have will become more common I suspect. Frugal is a flag to be flown high.
My parents were born in the early 1920’s and grew up in the Great Depression. Growing up, I saw my father save old washers, screws, bolts and nails in coffee cans. He told me “you never know when you might need one. I actually do that myself and right now, it looks like I made the right choice.
I am on a automatic delivery schedule for my home heating oil. For some reason, the Oil Company delivered today, way earlier than they usually do. It only took 33.8 gallons to fill my tank (275 gal tank). I had filled it last season at the end of the heating season. That 33.8 gal is going to cost me 188 dollars. (5.60/gal).
I’m thinking my oil company is filling their customers tanks earlier this year because they want to make sure every one has some, I guess.
Things are going to get a l0t worse before they begin to get any better…
mspsgt: My father also grew up during the Depression and saved all sorts of “useless junk” that eventually became useful again. I do the same, with nuts, bolts, washers, etc. Same with pennies, nickels, dimes and quarters. They pile up.
My Grandma lived with us while I was growing up, she was another Depression Survivor.
She would reuse tin foil and save buttons from clothing that was beyond repair and was finally tossed into the “rag bag”.
She also would save leftovers and re served everything.
We had a huge pot of green beans one time that we ate on for about 5 days.
The serving size dwindled down, down, down until the last serving was in a teacup my Grandma set on the table and my little brother finally ate the last of them.
She threw NOTHING away, we ate everything up.
That’s my mother. Saves a spoonful of peas and complains about the fridge being too full of leftovers.
The oil company may have to pay their supplier, too. I don’t think it will hurt to have the tank totally full, though, unless prices start coming down. When is your automatic delivery schedule supposed to start for the season?
I usually get my first delivery around the middle of December, after I have run the heat for some time. I live in northern Maryland on the Pa line and typically I might turn on the heat for the first time in mid November, but have used it as early as middle of October some years. I’m contemplating setting my thermostat at 63 this year and just wear warm clothes inside. I upgraded my windows to triple pane argon gas filled ones three years ago and have seen some improvement in insulation.
That’s impressive! I’m at 30yrs with my 3 bath towels,33yrs with my truck, 30 yr old dress shirts that I still wear regularly,41 yr old Makita power tools…..Frugality,stingy, cheap,whatever you want to call it,is and always will be real Environmentalism.
That’s great you have things in use that long. I inherited tools from Dad who inherited tools from his Dad. My grandfather was a lineman for Indiana Power and climbed power poles into his 70s. I still use his side cutters and other assorted hand tools of his from the 1920s and before.
Amazing how good old American products last and last and those who were steeped in the strife of the Depression left a lasting imprint on future generations.
The lineman bag I drag around in the truck still holds a prized remembrance, the 1/4″ drive ratchet kit my mother installed cockpit instruments with in B24 bombers during the war. Her name is roll stamped on every piece. It all still works.
My problem? After decades of running a business in industry, it’s finding the stuff, which is particularly a problem downsizing in old age, not having the big shop to neatly organize everything. Oh, well, all we have is time.
My bath sheet, that completely wraps around my round body was over 25 years old when it ripped. It was a sad day for me…..🤷
Niagra Frontier: I dry off with a roll of Bounty. It’s the Quicker Picker Upper.™
Who criticized you Niagara Frontier and why is it any of their business?
We are using some bath towels that my Mom had and in her house.
She bought them back in the 70s.
They were made in America, made to last.
At a house sale I always look for towels with an American label. I have given them to kids and grandkids who immediately notice the difference. Man, we had some quality stuff made in the USA.
My living room furniture is from 1960 and in pristine condition. I solidify the Scots’ reputation.
I represent those stereotypes as well.
Isn’t it true that copper wire was invented in Scotland? Two Scots pulling on a penny and neither letting go?
😂
Your typical Scot has money in his pocket that will never see the light of day.
Mid Century mod furniture is a hot commodity for the Hipsters-you have hidden treasure for sure!!
Halloween candy is almost ridiculously small now. Butterfingers about the size of your thumbnail. Used to be you could get three bites or so out of what looked like a 1/2 to 1/3 of a regular candy bar. I only know this because I may have opened a bag of Halloween candy my wife brought back from the World of Wally yesterday.
I bought 182 pieces of Halloween candy 15 days ago and still have it. First, it’s in the storage closet and not opened. Second, it’s not chocolate. The kids loved getting gummy bears last year so this year it’s them and some other candy. $17 and it will last maybe 90 minutes depending on the weather. I couldn’t see spending twice as much on smaller chocolate candies.
dollar tree had lollipops with 38 to a package x3 so for 3.75 have some to supplement when sons candy runs out plus they have gum inside
“I only know this because I may have opened …”
I can hear you now:
“Yeah — I MAY have opened that …”
“the only part of the economy that is growing is the part that fuels the energy needs of Europe.” – Sundance. That growth is to our detriment and will result in a colder indoors this winter for all of us with less fossil fuel energy available and costing more! ChiCom Joe will do the same thing with our food! Because of ChiCom Joe, the stolen election and Democrats We The People will have much less energy and food in the days, months and years ahead!! But at least the planet will be saved!!!/s
Don’t believe your lying eyes or wallet! We are NOT in recession he says. Wait till the rail strike drives prices through the roof.
And the, was it 2 weeks or 10 days, away from a diesel shortage, particularly on the east coast? What timing/s
Everyone will be affected but trucking and rail shipments of food to major cities will mushroom into a major unrest quickly, then add in winter power outages for a real hellscape.
20 to 25 days and I’m in one of the affected states. I think I’ll to of the gas tank tomorrow, just in case…
I’m thinking this means that any sale prices I expected for Thanksgiving may not materialize.
Fraud. Total fraud.
Let’s go Brandon.
As always Sundance dives deep and looks behind the lying headlines in the MSM. Not much has changed since How to Lie with Statistics was published in 1954. If you ever want to find me, I’m the one in the grocery store asking every person at the meat counter, “Remember when we could afford to buy meat? Damn everybody who voted for Biden!”
There I was in the grocery store parking lot, unloading my cart. A car was parked nearby with a lot of pro Biden/Harris and other Democratic bumper stickers. Another shopper saw it and asked the store employee who was gathering the carts “Can I get that thing towed ?” The store employee was quick to respond — “I will help you dial the number.” And this was in Suburban Blue State Illinois.
If you want to see a lot of angry people, just look at the faces at the grocery store checkout line.
For real: Recommended reading by Bill Gates!
Digging deeper into the sofa these days.
Let’s see. Energy exports. Does anyone have anywhere to go with those two words????
Bidenomics: On track and firing on all three and a half cylinders.
Gross private domestic investment – Residential down 26.4% !!! Wow !
Sundance and other Learned Ones – I would love to hear your thoughts on that number ! I would also love to see it broken down amongst housing sectors
The long term effects of this squeeze on fuel will be with us for decades. If we can even make it. Oi leases just don’t happen overnight. Refinery capacity is collapsing while we invest in solar and wind. Remember Solentra and other green energy production financed by Obama and the loss of billions chasing technologies that can’t meet our needs. Without a strong republican majority and a will to intervene in this foolishness we can expect to collapse.
Refinery executives have told the ignorant but useful, giggly Granholm that shuttered refineries will not reopen. Pretty soon those energy exports will dry up. What of GDP then?
The west is committing suicide in aid of what exactly, when BRICS nations will thrive and grow. Does the “World” Economic Forum’s owners think they have any control of those countries?
By the way, with Sweden’s new government securely installed, that country has done a complete 180, and will now turn its attention to restarting fossil fuel production in all its forms. Not for them freezing in the Scandinavian dark winter. They have seen the existential foolhardiness and insanity of Greta Thunberg-Rothschild’s puppeteers’ certifiable lunacy. Their other problem won’t be so easily solved…but at least on this, a desire to survive seems to have returned.
Looks like the pig got some lipstick.
But it’s still a pig.
apropos of that
I’ve got Fox News on with the sound off, and Marie Harf is on the panel
Speaking of a pig with makeup on
So all going according to plan then…
Everything is fine. Joe said so.
I mean it is so obvious the man is wearing himself out working so hard for all of us. For crying out loud he is so weary brain fog has overcome him most days but don’t worry, his wife is a doctor.
Oh! and aunt Nancy says just change the subject if anyone were to ask about inflation.
—
Reality . . . it is gonna get bad.
Bad now, Phflipper…we are on an existential cusp of something worse. We are standing on the periphery of this madness watching what a little over two years ago was impossible to imagine. It’s going to get “way badder”.
If you couple a collapsed fuel market here at home wit a never negotiate strategy of Biden on Ukraine we’re looking at December 7 2022.
At least December 7, Patrick…probably more like an August 6 and 9.
Especially as the Pentagon has now said it is willing to consider the use of nuclear weapons against a non nuclear threat (see Zerohedge).
Makes a declining GDP look not so worrying I think…people in charge of this administration in every department are insane, especially at the Pentagon and the DoD.🙏
Derp State chaff and countermeasures, incoming.
Brace for return fire.
So the money we printed to send to Ukraine from the Congress and the weapons we built out of our tax dollars to give to Ukraine for free count as increasing our GDP? Wow, let’s keep doing that! Also, the increase in natural gas price we all have to pay helps the export of LNG price to be higher because of the Russiam embargo and cutting US production and bombing Nordstream, so gas producers make more money, the economy looks better and the middle class gets screwed. Wow, let’s keep doing that too!
I’ll see see your hydrocarbon follies and up you a nuclear false flag!
How do you like them atoms?
What’s not being shown in those Ukraine export numbers is the 80+% returning in cash kickbacks to military vendors, contractors and politicians
2 straight quarters of growth and we’ll be out of the recession… right?
With this being the Christmas quarter, that might very well happen.
I dunno about that GDP for the 4th quarter being positive without creative accounting. And that’s including the LNG and weapons exports.
As is said…figures lie and liars figure.
But but they keep saying we aren’t in a recession….
Look!!! A squirrel!!
I think this year a lot of people are going to have that hard candy Christmas about which Dolly Parton sings.
I just gave a donation to Toys for Tots. This year I suspect there will be many more children whose Christmases will be a little brighter because of this organization. I hope so anyway.
Nothing more than the continuation of Barry’s wealth redistribution …
Figures don’t lie, but liars figure.
I’m sure it will be revised down later…
To .05%? .002%?
The cheerleaders still will all say, “See, we’re not in a recession.”
Mostly moot as the reported numbers have been fake for some time.
See http://www.shadowstats.com for some back story on the reporting from the Bureau of Labor Statistics over time.
‘In the third quarter we exported hundreds of billions worth of energy products, including massive liquified natural gas (LNG) sales to Europe.’ – Sundance
In part, these energy exports were fueled by “Joe Biden” selling off nearly half the Strategic Petroleum Reserve. He did so in defiance of the governing statute requiring an actual shortage of crude oil, not a merely an election-motivated attempt to depress gasoline prices. Moreover, dumping the SPR when a land war is raging in eastern Europe compromises national security.
“Joe Biden” should be impeached – along with Energy ‘secretary’ Jennifer Granholm – for the reckless squandering of America’s crude oil reserves. The incoming Republican-majority Congress can and should start this process on January 3rd.
Kevin McCarthy says we must keep our eye on the ball… no impeachments, only anti-inflation policies. Did you think he’d actually fight back?
Thanks Sundance for the information. I would like to see a graph of how much less we are receiving with each purpose. Then the loss of goods in purchases shown on a graph as well. Everything is in smaller bottles and packages. Even bread is smaller in the last month or two.
Retired Magistrate here: Home heating oil is up to $115.00 a barrel. I am thinking this will equate to over $6.20 a gallon or more in the coming weeks.
For those of us who heat with fuel oil, are seniors and are on a fixed income this takes a huge bite out of monthly income.
This Winter will be interesting, to say the least.
Worse for the Northeast.
Know someone with a cousin in Alberta. They recently paid about $6.19 (Canadian) a liter. They are typically a few months ahead of Maine in regards to pricing of heating oil.
To extrapolate, there’s about 2.8 liters to a gallon. Then you can figure the US Canadian exchange rate from there. That’s going to be more than a bit painful.
That would be 3.78 liters per gallon, not 2.8.
There’s no such thing as a barrel of home heating oil. There’s a barrel of crude oil, out of which can be refined heating oil, diesel, gas, kerosene etc.
I think the OP made a typo since most likely her tank is filled by a bulk dispensing truck in gallons. The 6.20/gallon number makes sense. The barrel part likely refers to where she thinks crude is going.
I’d love to get my hands on a drum of off-highway diesel/heating oil for 115 bucks 🙂
Hmmm, so selling energy abroad adds to the GDP? Well, isn’t that special? No wonder they are doing it. Energy is the only thing we currently produce in US (at volume) and we sell it abroad.
Statistics are no substitute for judgement.
I watch a lot of prepper and finance channels, and am wondering just how bad this is going to get.
Lots of double counting with the GDP figures. When the govt buys oil for the SPR it counts towards GDP. When the govt sells that same SPR oil abroad it is counted again as GDP. Same goes with all the weapons that Biden is buying from Raytheon and the other defense contractors. Counts as GDP when bought and again when they are transferred out of the USA.
All as planned to prevent three consecutive quarters of GDP right before the election. We’re not fooled. Also defense contractors manufacture those weapons for the war pumped up the numbers.
Comes down to “Ox goring” as in “who’s ox is gored?”
Or “Don’t piss on my leg, and tell me its raining!”
The Potatus and “experts” and media, can say whatever they want; when people SEE and EXPERIENCE first hand, that for them and those around them, economic situation getting worse, propoganda CAN NOT persuade them to disbelieve their lieing eyes.
Its WORSE. They KNOW its worse, and all the propoganda, and internet censorship in the World will not cause them to celebrate.
Propoganda MAY have some effect, on WHY.
Some WILL be conned, that its cause of Putin, aftereffects of Covid,or even those MAGA extremists,…
But Brandon is not going to be able to persuade very many, that the “U.S. economy is going like hell!” when it is going TO hell.
And, I think fewer and fewer are believing the narrative as to WHY.
IF we hadn’t had 4 years of PDJT’s economy, MAYBE.
Just as, if we hadn’t achieved true ENERGY INDEPENDANCE, people wouldn’t grasp that it was POSSIBLE, and so would not realise just how insane Brandons energy policies are.
Two quarters in succession of negative GDP defines a recession. Does one-quarter of positive GDP mean the recession is over? I’ll bet it will be spun that way, especially directly before the midterm election.
Count on them calling it a double dip recession in January and blaming the Republicans for it all.
I would not put it past the regime to have faked this midterm GDP bump. We all know how these scumbags operate.
I commented similarly near top of thread
Not nearly as concisely as you, though
… extra points for brevity
Will these GDP numbers be adjusted downward, revised, after the mid-term elections are over?
What are we to make of this?
https://www.cnn.com/2022/10/26/energy/europe-natural-gas-prices-plunge/index.html
The biggest fact missing is Per Capita GDP.
With new grads entering workfarce, illegals flooding in. Using GDP vs Per capita GDP is not correct.
60% of GDP is consumer demand. The illegals are consumers.
So the denominator grows by 2%+ and GDP grows by 2% + makes it look flat to me except for oil exports and grain exports which doubled since last year.
Wait till the numbers get revised.
I was out driving today and heard this “good news” on the hourly break-in of national news. I knew there had to be more than met the eye and not only knew you would do the deep dive to analyze it, but also that it would turn out to be not-so-rosy after all.
Zerohedge reports that FarceBook’s “Zuckerboy” lost $11,000,000,000 today via Metaverse stock crashing.
“Bozos” of Amazon had even worse news: Online sales both domestic and international have “lost money” and not yet turned “green,” and the company was kept from showing a loss because of Amazon Wireless Services.
The stock lost 20% + at the end of the day because of this bad news.
Do you think these 2 and their stockholders will agree that The Manchurian Marionette is “in charge” of a “roaring” economy? 😉
One massive metric that is always missed, how much money flowed to Mexico for all the dope that has been imported? How many billions?
The other elephant in the room is inflation. If I used to buy a tank of gas for $30, and now I pay $50, that increases GDP in raw but not real numbers.
So these weapons going to Ukraine — paid for by US taxpayers — Do they get counted as “exports”?
So glad Bexis is feeling the pain:
https://www.zerohedge.com/markets/amazon-implodes-more-20-after-missing-revenues-disappointing-aws-catastrophic-guidance
Looking at EIA data I suspect increased oil/gas price not volume is driving the export number.
Positive GDP in 3rd qtr was expected due to excessive inventory.
So Joe discovered how profitable oil can be. Turned two negative quarters right around and only had to drill into a big old salt dome in Louisiana to do it. And we all thought he was stupid.