December 5, 2013

3Q13 Gross Domestic Product, 2nd Reading: An Annualized 3.6%, Driven by Inventory Increases

Filed under: Economy,Taxes & Government — Tom @ 8:16 am

Expectations are for a 3.0 percent annual rate, up from 2.8 percent in early November’s initial estimate.

The report will be here at 8:30 a.m.


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 3.6 percent in the third quarter of 2013 (that is, from the second quarter to the third quarter), according to the “second” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 2.5 percent.

The GDP estimate released today is based on more complete source data than were available for the “advance” estimate issued last month. In the advance estimate, the increase in real GDP was 2.8 percent (see “Revisions” on page 3). With this second estimate for the third quarter, the increase in private inventory investment was larger than previously estimated.

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

The acceleration in real GDP growth in the third quarter primarily reflected an acceleration in private inventory investment, a deceleration in imports, and an acceleration in state and local government spending that were partly offset by decelerations in exports, in PCE, and in nonresidential fixed investment.

The increase is nice, if the inventories which were created get sold without deep discounting. The prospects for that don’t look good, based on early Christmas shopping season results.

More later.


UPDATE: Observations –

  • Personal consumption expenditures were revised down from 1.04 points of the GDP increase to 0.96.
  • Net exports fell from contributing 0.31 points to 0.07.
  • Inventory increases went from 0.83 points to 1.68 points — more than the 0.8-point net change in the GDP pickup.
  • Business equipment went from -0.21 points to 0.00.

You want to be happy that growth is a decent number for once, but the inventory element puts a huge damper on things.

Initial Unemployment Claims (120513); 298K SA With a Big Asterisk

Filed under: Economy,Taxes & Government — Tom @ 7:29 am


Seasonal Adjustment Factors:

  • Week ended November 30, 2013 — 135.0
  • Week ended December 1, 2012 — 105.2

Raw Claims:

  • Week ended November 23, 2013 — 363,053 (before likely upward revision)
  • Week ended December 1, 2012 — 500,163

For the Bloomberg prediction to come true, actual claims (rounded) will have to be 337,000 or lower (337K divided by 1.052 is 320K, rounded).

Because last year’s comparable week didn’t have Thanksgiving in it, I really don’t know how to predict this one. So I won’t.

The report will be here at 8:30 a.m.

HERE IT IS (permanent link):


In the week ending November 30, the advance figure for seasonally adjusted initial claims was 298,000, a decrease of 23,000 from the previous week’s revised figure of 321,000. The 4-week moving average was 322,250, a decrease of 10,750 from the previous week’s revised average of 333,000.


The advance number of actual initial claims under state programs, unadjusted, totaled 313,973 in the week ending November 30, a decrease of 54,507 from the previous week. There were 500,163 initial claims in the comparable week in 2012.

Last week was revised up by 5,000.

This is a nice, low seasonally adjusted result, but it’s hard to peg its significance, given that it was Thanksgiving week. One could argue that 313,000 raw claims in three business days is quite a few, and that the seasonal adjustment factor used was way too high.

Last year’s Thanksgiving week seasonal adjustment factor (the holiday was on November 22) was 91.9. If that factor had been used today instead of the 105.2 DOL used, seasonally adjusted claims would have come in at 342,000 — a whopping 44,000 claims higher. Also, last year’s raw claims during Thanksgiving week were 358,869 (which seasonally converted to 390K). This year’s claims were a decent 12.5% below that.

I think in the 320s and 330s is where we really are after consistent seasonal adjustments.

Politico: Obamacare Causing Americans to Lose Their Doctors Is a ‘New Weapon’ for GOP

Seung Min Kim and Jennifer Haberkorn at the Politico have apparently been living in hermetically sealed Beltway caves since early October.

In an item which appeared Tuesday evening, the pair acted as if the idea that Americans stand a great chance of losing access to their current doctors and other medical providers as a result of signing up for a health care plan through the Obamacare exchange is something brand new. Kim and Haberkorn write that Republican opponents of Obamacare are going to have to “replicate the uproar” which occurred with “If you like your plan, you can keep your plan,” when the uproar has been building for weeks, based on numerous stories involving real people (bolds and numbered tags are mine):


Thursday Off-Topic (Moderated) Open Thread (120513)

Filed under: Lucid Links — Tom @ 6:05 am

This open thread will stay at or near the top today. Rules are here. Possible comment fodder may follow. Other topics are also fair game.

Positivity: A Church without joy is unimaginable, Pope Francis says

Filed under: Positivity — Tom @ 6:00 am

From Vatican City:

Dec 3, 2013 / 06:07 am

The Pope focused his daily homily this morning on the themes of joy and peace, emphasizing that our God “is joyful,” and that the Church’s mission of transmitting this joy to others brings authentic peace.

“You can’t imagine a Church without joy,” the pontiff explained in his Dec. 3 homily, “and the joy of the Church lies precisely in this: to proclaim the name of Jesus.”

Pope Francis directed his homily to those gathered in the Vatican’s Saint Martha guesthouse, where he has chosen to reside.

He began by reflecting on the day’s first reading taken from the prophet Isaiah, which describes how in the coming of the messiah, “the lion and the sheep shall abide together.”

This passage, observed the Pope, speaks to us of the peace that we all long for and which only the Messiah can bring, while in the Gospel, when Jesus praises his Father for what he has revealed, “we are able to see a little into the soul of Jesus, the heart of Jesus,” which is “a joyful heart.”

“We always think of Jesus when He preaches, when He heals, when He travels, walks along the street, even during the Last Supper,” the Pope reflected, “but we aren’t used to thinking about Jesus smiling, joyful.”

“Jesus was full of joy, full of joy,” explained the pontiff, quoting Jesus’ words from Luke’s Gospel when, from the intimacy with his Father, the Lord proclaims “I rejoiced in the Holy Spirit and I praised the Father.”

This “is precisely the internal mystery of Jesus,” stated the Pope, “that relationship with the Father in the Spirit. It is His internal joy, the interior joy that He gives to us.”

“And this joy,” he explained, “is true peace,” which is not static, quiet or tranquil.

“Christian peace is a joyful peace, because our Lord is joyful,” the Pope continued, and because of this Christ wills that his spouse, the Church, share in this joy, which we only find when proclaiming “the name of Jesus.” …

Go here for the rest of the story.