The BEA released its Third Estimate of Third Quarter GDP today. In the third estimate GDP rose at 3.5% annualized, up from 3.2%.
The acceleration in real GDP in the third quarter primarily reflected an upturn in private inventory investment, an acceleration in exports, a smaller decrease in state and local government spending, an upturn in federal government spending, and a smaller decrease in residential investment, that were partly offset by a smaller increase in PCE and an acceleration in imports.
The price index for gross domestic purchases increased 1.5 percent in the third quarter, compared with an increase of 2.1 percent in the second quarter. The PCE price index increased 1.5 percent, compared with an increase of 2.0 percent. Excluding food and energy prices, the PCE price index increased 1.7 percent, compared with an increase of 1.8 percent.
Doug Short at Advisor Perspectives provides some interesting charts and commentary.
Real GDP Historic Trend
Today’s number is 14.8% below trend, the largest negative spread in the history of this series.
Real Quarterly GDP Year-Over-Year
“A particularly telling representation of slowing growth in the US economy is the year-over-year rate of change. The average rate at the start of recessions is 3.35%. Ten of the eleven recessions over this timeframe have begun at a higher level of real YoY GDP,” comments Doug Short.
2016 GDP
If we take into consideration the most recent Nowcast report from the New York Fed, growth for all of 2016 will be close to 1.875%.
There is a new Nowcast tomorrow and I actually expect it to go up slightly based on news this week. GDPNow has a estimate of 2.6% for 4th quarter. Both report tomorrow.
Mike “Mish” Shedlock
“Real gross domestic product increased at an annual rate of 3.5 percent in the third quarter of 2016 (table 1), according to the “third” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 1.4 percent.”
…
Oooooo … I can hear all the “experts” now – can’t have a recession with that level of growth (and acceleration).
Harken back to December 2007 (uh, the month last recession started) and 3rd estimate for Q3 2007 came out –
“Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 4.9 percent in the third quarter of 2007, according to final estimates released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 3.8 percent.”
https://www.bea.gov/newsreleases/national/gdp/2007/gdp307f.htm
There are a lot of factors that are pointing towards an upcoming recession.
We had the dot com crash followed by the housing crash. Next up is the global bond bubble crash. keeping it simple works best for me.