October 31, 2007

Another ‘Worst Economy Since Hoover’ Update: 3rd Quarter Advance GDP Growth Is 3.9%

Filed under: Economy,Taxes & Government — Tom @ 9:46 am

Stealing the tag line used by Matt at Weapons of Mass Discussion any time there is good news about the economy — This is how the press release from Uncle Sam’s Bureau of Economic Analysis opens:

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 3.9 percent in the third quarter of 2007, according to advance estimates released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 3.8 percent.

The Bureau emphasized that the third-quarter “advance” estimates are based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3). The third-quarter “preliminary” estimates, based on more comprehensive data, will be released on November 29, 2007.

The increase in real GDP in the third quarter reflected positive contributions from personal consumption expenditures (PCE), exports, federal government spending, equipment and software, nonresidential structures, private inventory investment, and state and local government spending that were partly offset by a negative contribution from residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.

Translation: Despite the housing drag, the rest of the economy is fine.

See for yourself: Combined with the second quarter’s final reading of 3.8%, the 7.7% two-quarter GDP growth total, if it holds up or improves in future revisions, is higher than any two consecutive quarters since Q3 & Q4 of 2003′s combined 10.2% (7.5% +2.7%). The last time there were two consecutive quarters of 3.8% or higher was Q3 & Q4 of 1999′s 4.8% and 7.3%.

Another tenth of a percent to get to 4.0 would have been really nice. I suspect 4% would get a lot more coverage than 3.9%. We’ll see how Old Media handles it.

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1 Comment

  1. Yes, but don’t you watch Lou Dobbs? All of our jobs are going overseas! Yeaaarrrrgh.

    Comment by Will Franklin — October 31, 2007 @ 11:10 am

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