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- Advance Q3 GDP: +3.5% vs. +3.2% consensus and prior -0.7% - the best growth in two years. GDP price index +0.8% vs. +1.3% consensus and prior flat.
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This news story has 7 comments:
I also thought he stats for Per. Disp income to be interesting as well as savings. Both in a radical decline. This seems to signal that the unemployed are forced to draw down remaining reserves, and the employed are making less or attempting to get rid of their debt. Doesn't leave much left over for Q4 purchases which I think is going to be an ugly season.
"Disposable personal income decreased $20.4 billion (0.7 percent) in the third quarter, in contrast
to an increase of $138.2 billion (5.2 percent) in the second. Real disposable personal income decreased
3.4 percent, in contrast to an increase of 3.8 percent. "
On Oct 29 08:53 AM Papaswamp wrote:
> Motor vehicle purchases alone accounted for 1.66% via cash for clunkers....does
> that mean the real (non-govt intervention) GDP is 1.84%?
>
> I also thought he stats for Per. Disp income to be interesting as
> well as savings. Both in a radical decline. This seems to signal
> that the unemployed are forced to draw down remaining reserves, and
> the employed are making less or attempting to get rid of their debt.
> Doesn't leave much left over for Q4 purchases which I think is going
> to be an ugly season.
>
> "Disposable personal income decreased $20.4 billion (0.7 percent)
> in the third quarter, in contrast
> to an increase of $138.2 billion (5.2 percent) in the second. Real
> disposable personal income decreased
> 3.4 percent, in contrast to an increase of 3.8 percent. "
We are seeing cash for clunkers annualized, as well as the homebuyers tax credit. Clunkers is done and with rates inching up and mortgage applications falling off a cliff, maybe homebuyers tax credit is done too.
Backing out the effect of these two programs leaves this Q GDP probably closer to 1%.
I agree your comments on employment as well, sustainable GDP growth is going to be very difficult with no sign in sight YET of a notable upturn.
While we can expect to rally off the back of these numbers, backing out these programs from next Q and assuming the employment picture doesn't change, the early estimates for NEXT quarters GDP could be a nasty reality check.
>"Not truly "the best growth in two years". Eliminate cost cutting and
>"tax dollars for clunkers" and you've got a very dire situation.
> Oh, and more ugly unemployment data just came out as well.
> I trust no market pump off any of this "smoke-n-mirror" GDP data. "