Remember when in January 2014, Q1 GDP was expected to rise 2.6%? Well, here comes the final Q1 GDP revision and it’s a doozy: at -2.9%, far below the -1.8% expected and well below the -1.0% second revision, it is an absolute disaster, and is the worst print since Q1 2009.
And while a bad GDP print was largely expected, the driver wasn’t: personal consumption expenditures somehow crashed from 3.1% to just 1.0%, far below the 2.4% expected, meaning that all hope of a consumer recovery is dead. Finally, as a reminder, US GDP has never fallen more than 1.5% except during or just before an NBER-defined recession since quarterly GDP records began in 1947. Good luck department of truth propaganda machine, because even assuming 3% growth every other quarter in 2014 means 2014 GDP will be 1.5% at best!
Is it possible their assessment of popular sentiment was so off base? It seems doubtful. My guess is these projections were only for public consumption. Still, to the extent they were taken seriously, it reflects a loss not just of control but even the ability to measure public opinion. It would be amusing if all the market manipulations left the banksters holding the bag, trying to prop up the market long after the “suckers” had left. Except they’ll find a way to socialize the cost.