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**don** · January 30, 2013, 01:09 PM

Re: Q4 2012 Advance Estimate: GDP "unexpectedly" Contracts 0.1%

No surprise to most people, including the sheeple. They can't give out the numbers but they know things are bad and getting worse.

**jtabeb** · January 30, 2013, 01:29 PM

Re: Q4 2012 Advance Estimate: GDP "unexpectedly" Contracts 0.1%

Originally posted by don View Post

No surprise to most people, including the sheeple. They can't give out the numbers but they know things are bad and getting worse.

Indeed! The street "smart" will be responding "well Duh!" To this "news", whereas the "Street" will be responding with "Huh? How'd that happen?".

**Southernguy** · January 30, 2013, 02:11 PM

Re: Q4 2012 Advance Estimate: GDP "unexpectedly" Contracts 0.1%

The solution is simple: begin selling heavy weaponry to US population: heavy machine guns, RPG�s, mortars...why not drones?
Defense spending would jump. And it wouldn�t be deficit creation.
The market I suspect is virtually infinite

**c1ue** · January 30, 2013, 02:20 PM

Re: Q4 2012 Advance Estimate: GDP "unexpectedly" Contracts 0.1%

I wonder also how much of that consumer spending was AK/AR related.

I think the gun industry did 2 or 3 years worth of sales just in December...

**NCR85** · January 30, 2013, 02:58 PM

Re: Q4 2012 Advance Estimate: GDP "unexpectedly" Contracts 0.1%

Originally posted by c1ue View Post

I wonder also how much of that consumer spending was AK/AR related.

I think the gun industry did 2 or 3 years worth of sales just in December...

Gun sales are measured in the lower single digit billions (2.7 billion for 2011); doesn't affect GDP significantly even in extreme cases.

**BadJuju** · January 30, 2013, 03:09 PM

Re: Q4 2012 Advance Estimate: GDP "unexpectedly" Contracts 0.1%

Really? That is extremely surprising, NCR. I would have thought the gun industry would be much larger than that.

**NCR85** · January 30, 2013, 03:45 PM

Re: Q4 2012 Advance Estimate: GDP "unexpectedly" Contracts 0.1%

I looked up a few more numbers to be sure. It's hard to find unambiguous data for some reason.

Here's a source claiming "The U.S. firearms industry's [annual] economic impact is $32 billion.", whatever "economic impact" means...
http://finance.yahoo.com/blogs/daily...184833993.html

1% of annual GDP growth is 150 billion. Changes to an industry of that size could sort of make a (slight) impact on GDP growth, but I doubt that 32 billion figure would get multiplied by a significant factor just because assault rifles are having a popular year/quarter.

**NCR85** · January 30, 2013, 03:58 PM

Re: Q4 2012 Advance Estimate: GDP "unexpectedly" Contracts 0.1%

http://www.businessinsider.com/fed-h...t-stunk-2013-1

The Fed's take on today's GDP report (we think) is contained right here in the first sentence of its announcement just now.Information received since the Federal Open Market Committee met in December suggests that growth in economic activity paused in recent months, in large part because of weather-related disruptions and other transitory factors.
So the Fed doesn't see the weakness as being fundamentals-related: Just weather and other temporary stuff.

Blame it on the weather...

So are they saying the cut in military spending was a weather related event..? Or are they referring to something else entirely while ignoring that elephant in the room?

**c1ue** · January 30, 2013, 04:51 PM

Re: Q4 2012 Advance Estimate: GDP "unexpectedly" Contracts 0.1%

Originally posted by NCR85

Gun sales are measured in the lower single digit billions (2.7 billion for 2011); doesn't affect GDP significantly even in extreme cases.

Well, let's do the math.

If GDP = $15 trillion, and consumer goods growth was 1% in that, this yields $150 billion. Divide by 4 = $37.5 billion. If gun sales are $2.7 billion a year, and December saw sales equivalent to 3 years, $8.1 billion is a pretty significant chunk of $37.5 billion.

Of course this is speculation, but here are some harder numbers:

http://online.wsj.com/article/SB1000...toryCollection

Collections of federal excise taxes on the sale of new firearms and ammunition, a proxy for gun sales, rose to $453 million in 2009, a 45% jump from the year before. That's a significant surge compared with the average 6% annual increase reported by the Treasury Department's Alcohol and Tobacco Tax and Trade Bureau from 1993 to 2008. Excise tax collections have moderated somewhat, to $344 million in 2011, but remain above pre-2008 levels.

And from this site:

http://www.ttb.gov/tax_audit/atftaxes.shtml

It appears the excise tax is 10% to 11% of sale price.

A multi-billion dollar spike in gun sales in December would thus definitely have an impact on GDP - not all of the 1% in consumer goods spending increase, but a very significant one depending on how large the spike was.

Let's not forget that the jump in 2008/2009 was before actual legislation was proposed. I do remember ammo costs went up then, but I do not recall mass unavailability of many high ticket guns then, unlike this time.

**NCR85** · January 30, 2013, 05:11 PM

Re: Q4 2012 Advance Estimate: GDP "unexpectedly" Contracts 0.1%

December saw sales equivalent to 3 years, $8.1 billion is a pretty significant chunk of $37.5 billion.

Fair enough. I didn't think the surge in sales would be quite *that* large. Some confirmation of that claim would be helpful.

Keep in mind, though, that assault rifles aren't the only guns being sold. So assuming the whole 2.7 billion gets multiplied by 3 just to get december's sales figure is a bit of a stretch.

**NCR85** · January 30, 2013, 05:30 PM

Re: Q4 2012 Advance Estimate: GDP "unexpectedly" Contracts 0.1%

http://advisorperspectives.com/dshor...-Deflators.php

GDP growth was even lower when PCE or CPI are used as the deflator.

Dean Baker weighs in with a great piece of analysis:
http://www.cepr.net/index.php/data-b...aowth-negative

**don** · January 30, 2013, 06:31 PM

Re: Q4 2012 Advance Estimate: GDP "unexpectedly" Contracts 0.1%

Guess the election is over . . .

**flintlock** · January 30, 2013, 07:03 PM

Re: Q4 2012 Advance Estimate: GDP "unexpectedly" Contracts 0.1%

Its not only guns, but the ammo, accessories, etc. All those silly do-dads some clamp all over their firearms. Scopes, flashlights, lasers, Swiss army knives. Then you gotta buy the camo clothing, camo chairs, camo boots, camo razors, etc.

**GRG55** · January 31, 2013, 12:52 AM

Re: Q4 2012 Advance Estimate: GDP "unexpectedly" Contracts 0.1%

Originally posted by NCR85 View Post

http://www.businessinsider.com/fed-h...t-stunk-2013-1

Blame it on the weather...

...

I'm amused (but not surprised) that the Fed isn't being called for using that lame excuse.

“Growth in economic activity paused in recent months, in large part because of weather-related disruptions and other transitory factors,” the FOMC said yesterday hours after the Commerce Department said gross domestic product shrank at an annual rate of 0.1 percent during the fourth quarter...

If the Fed really thought this was the case why would it need to do this much to deal with "transitory factors"?

The FOMC said asset purchases will remain divided between $40 billion a month of mortgage-backed securities and $45 billion a month of Treasury securities. The Fed will continue reinvesting any Treasury securities that mature and will reinvest its portfolio of maturing housing debt into agency mortgage-backed securities.

The Fed also left unchanged its statement that it plans to hold its target interest rate near zero as long as unemployment remains above 6.5 percent and inflation remains no more than 2.5 percent...

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Q4 2012 Advance Estimate: GDP "unexpectedly" Contracts 0.1%

Q4 2012 Advance Estimate: GDP "unexpectedly" Contracts 0.1%

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