October 27, 2018

3Q18 Gross Domestic Product, Advance Estimate (102618): An Annualized 3.5 Percent

Filed under: Economy,Taxes & Government — Tom @ 10:30 am

From the government’s Bureau of Economic Analysis (PDF with tables):

Real gross domestic product (GDP) increased at an annual rate of 3.5 percent in the third quarter of 2018 (table 1), according to the “advance” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 4.2 percent.

The Bureau emphasized that the third-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see “Source Data for the Advance Estimate” on page 2). The “second” estimate for the third quarter, based on more complete data, will be released on November 28, 2018.

The increase in real GDP in the third quarter reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, state and local government spending, federal government spending, and nonresidential fixed investment that were partly offset by negative contributions from exports and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased (table 2).

The deceleration in real GDP growth in the third quarter reflected a downturn in exports and a deceleration in nonresidential fixed investment. Imports increased in the third quarter after decreasing in the second. These movements were partly offset by an upturn in private inventory investment.

Current dollar GDP increased 4.9 percent, or $247.1 billion, in the third quarter to a level of $20.66 trillion. In the second quarter, current-dollar GDP increased 7.6 percent, or $370.9 billion (table 1 and table 3).

The price index for gross domestic purchases increased 1.7 percent in the third quarter, compared with an increase of 2.4 percent in the second quarter (table 4). The PCE price index increased 1.6 percent, compared with an increase of 2.0 percent. Excluding food and energy prices, the PCE price index increased 1.6 percent, compared with an increase of 2.1 percent.

The 3.5 percent is lower than the 3.9 percent the Atlanta Fed was estimating mid-month (unusually, it wasn’t updated on October 25 as promised). On the other hand, yesterday’s advance result was higher than Moody’s estimate of 3.3 percent. And at IHS Macro Advisers, the sum of the three monthly GDP growth figures averages out to 3.5 percent.

Here are the major components:

GDPcomponentsThru3Q18at102618

Obviously, the inventory change dominates the result — and since it probably won’t repeated in the fourth quarter, that might be a cause to start worrying about what that result will be.

So is drop in nonresidential fixed investment, as well as the continued negative contributions of residential fixed investment. The former seems somewhat likely to get upwardly revised in the government’s next two estimates.

I expected the Wall Street Journal and Investor’s Business Daily to jump on the negative import-export results. But only the Journal did:

Can economic growth from tax reform and deregulation stand up to the headwinds from higher interest rates, tariffs and perhaps a Democratic Congress? That’s the question we take away from Friday’s strong but somewhat disappointing report on economic growth in the third quarter. The answer isn’t obvious.

We’ll have to agree that the Journal’s question is the fundamental one — though the Democratic Congress is a far bigger threat, at least in the short-term, than the current back-and-forth on tariffs.

Under-reported Stories Catch-up (102718)

Filed under: Lucid Links — Tom @ 8:07 am

Here’s today’s roundup of stories from earlier this month which haven’t gotten the attention they deserve, all of which should be considered relevant to voters’ decisions as to which candidates — and which party’s candidates — they should support at the polls during this election cycle:

Eleven days after this post is a good time for readers to ask themselves whether they’ve heard aboutany of these“Six Democratic Scandals the Networks Are Burying This Election Year.” I’ll bet most readers here haven’t — and it involves the entire esetablishment press, not just the major broadcast and cable networks:

  • Beto O’Rourke Lied About DUI Arrest
  • Senate Admonishes Robert Menendez for Accepting Gifts
  • Sen. Claire McCaskill’s Husband Takes Advantage of Government Program for Poor to Make Millions
  • Former Staffer for Democratic Rep. Sheila Jackson Lee Arrested for Doxxing Republicans
  • Democratic Governor Nominee Jared Polis Pushes Female Employee
  • Keith Ellison Accused of Domestic Violence (this one has gotten some coverage, but nowhere near what it has merited, given that Ellison is DNC deputy chair and, incredibly, wants to be Minnesota’s attorney general. Additionally, Minnesota’s Democratic Farm Labor Party (its version of Democrats) engaged in a whitewash “investigation” pretending tanglible evidence of Ellison’s abuse doesn’t exist. It does.

Here’s another scandal which broke just after the previous item was drafted: “Democratic Senator Heidi Heitkamp is in trouble. Like, big trouble … she identified women as sexual assault survivors without their permission” — in a campaign ad.”

In case anyone doubts that the transformation of the company whose motte used to be “Don’t Do Evil” is complete — “CEO Sundar Pichai confirmed months of rumors in a presentation hosted by Wired Magazine last night. Not only has Google worked on a new platform called “Dragonfly” to launch in China, they have perfected it for China’s censorship regime — which is tasked with stamping out dissent.”

The economy continues to perform very well“The monthly Job Openings and Labor Turnover Survey, or JOLTS, released by the Labor Department on Tuesday showed job openings rose to 7.136 million. Economists had forecast 6.9 million. The prior month was revised up to 7.077 million, the first time this number has ever exceeded 7 million. Until April of 2017, there had never been more than 6 million job openings. There will probably never be a better time for people who have been on the sidelines for years to return to the workforce.

More good economic news“U.S. Wins Title of World’s Most Competitive Economy for First Time in a Decade.” Gee, I wonder what caused this improvement?

Saturday Off-Topic (Moderated) Open Thread (102718)

Filed under: Lucid Links — Tom @ 6:00 am

This open thread is meant for commenters to post on items either briefly noted below (if any) or otherwise not covered at this blog. Rules are here.

Positivity: Pistol-wielding thug tries to rob a man in the street – but ends up getting SHOT by his armed victim

Filed under: 2nd Amendment,Positivity — Tom @ 5:55 am

From Detroit, in a story the UK Daily Mail carried (U.S. news stories on this incident are predictably rare; video at link; HT Weasel Zippers):

PUBLISHED: 11:56 EDT, 12 October 2017 | UPDATED: 15:41 EDT, 12 October 2017

  • Detroit police said Sanchez Quinn, 29, tried to rob two men at gunpoint outside a supermarket in Detroit on Sunday evening
  • In the CCTV footage, Quinn can be seen pulling out a weapon on one of the men walking by a red vehicle
  • But what he didn’t know was that his chosen victim was an armed Concealed Pistol License holder
  • The victim, who has not been identified, quickly pulled out his gun and opened fire on Quinn

An attempted armed robber got more than he bargained for after his victim pulled out a weapon of his own and fired back.

Detroit police said Sanchez Quinn, 29, tried to rob two men at gunpoint outside a supermarket in Detroit on Sunday evening.

In the CCTV footage, Quinn can be seen pulling out a weapon on one of the men walking by a dark red vehicle. …

Go here for the rest of the story.