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Final Third Quarter Estimates Are In: How’d we do?

Dec. 20, 2012 9:14pm Becket Adams

Real gross domestic product (GDP) increased at an annual rate of 3.1 percent in the third quarter (Q3) of 2012, up from Q2’s lackluster rate of 1.3 percent, according to the Commerce Department’s “third” and final estimate of the data.

GDP is a measurement of the value of a nation’s total output of goods and services. This is the first time since Q4 2011 that we’ve had a 3 percent-plus print.

“The GDP estimate released today is based on more complete source data than were available for the ‘second’ estimate issued last month. In the second estimate, the increase in real GDP was 2.7 percent,” the agency said on a statement on Thursday.

“The third estimate has not greatly changed the general picture of the economy for the third quarter except that personal consumption expenditures (PCE) is now showing a modest pickup, and imports is now showing a downturn,” the statement adds.

And this is where we find out what spurred Q3 growth [emphases added]:

The acceleration in real GDP in the third quarter primarily reflected upturns in private inventory investment and in federal government spending, a downturn in imports [“which are a subtraction in the calculation of GDP”], an upturn in state and local government spending, and an acceleration in residential fixed investment that were partly offset by a downturn in nonresidential fixed investment and a deceleration in exports.

Get that? Nearly half of that 3.1 percent annual rate is because of government spending (0.74 percent) and inventories (0.73 percent)

Report: GDP Increased at an Annual Rate of 3.1 Percent in Q3

Courtesy Zero Hedge

“Annualized Personal Consumption as a portion of the final number rose modestly from 0.99% to 1.12%, but still is well below the 1.42% in the first Q3 GDP estimate,” Zero Hedge notes.

Lastly, and this is crucial to note, fixed investment — an important indicator of longer-term economic growth — remain flat at 0.12 percent.

“In other words,” Zero Hedge explains, “in Q3 companies stubbornly refused to invest in capital investment … and will continue to do so as long as the Fed makes ‘investing’ in dividends and buybacks a more rewarding option.”

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Comments (12)

JACKTHETOAD
Posted on December 21, 2012 at 9:03am
Government fantasy = good. Reality = terrible. Surprised?

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Gary_K
Posted on December 20, 2012 at 10:12pm
The GNP is up due to the government saying inflation is around 2 % when in actuality it is around 6%.

http://www.shadowstats.com/article/no-414-hyperinflation-special-report-2012

http://www.shadowstats.com/

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SimpleTruths
Posted on December 20, 2012 at 10:03pm
Right wing logic:
Good news = propaganda
Bad News = Proof of failure, incompetence, planned destruction, etc.

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- Black Horse
  Posted on December 20, 2012 at 10:56pm
  Simpletruths = Idiot.
  
  Report this comment
media-bias-steals-elections
Posted on December 20, 2012 at 9:40pm
I’ve listened to many of the arguments, and I am getting prepared, by researching issues, and there is one conclusion we can not avoid? Raising taxes on the rich logically can only be practical for a short time if you were convinced it was necessary (I do not?) to correct imbalance in the market place (the numbers would support it afterwards), but long term tax rates spanning decades demonstrates a lack of creativity in the market place to shape the economy in spite of political events?

If the opposition is not making that argument, why? Shaping the economy allows you to remove the political power behind regulation?

In other words, how can log term tax rates improve economies, when the pressure is advancing in the opposite direction?

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MeMadMax
Posted on December 20, 2012 at 9:32pm
What a load of crap.
Why do they bother putting this crap anymore?
Why don’t they say: “The economy IS doing great, comrade!”?

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GoodStuff
Posted on December 20, 2012 at 9:31pm
Yeah! Four more years of economic stagnation! Ain’t it great!? Thanks Obama voters.

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- skippy6
  Posted on December 20, 2012 at 9:51pm
  Don’t forget the voters that didn’t show up…. They are to blame also…
  
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- cbrown
  Posted on December 20, 2012 at 10:30pm
  31.% GDP that is great news!! 2013 will be even stronger and we will recover faster than I expected. In his next term we will have 11+ million jobs, GDP growth will be 3-4%, deficit will come down steeper than I expected, folks on food stamp will reduce in 2013 by 20+%,…
  
  Happy days are here again. We are blessed to have Obama as our President.
  
  Report this comment
- DadRocked
  Posted on December 20, 2012 at 11:04pm
  Skippy6 – Absolutely correct…
  What was the number? 3Mil less went to the polls than in ’08?
  
  Don’t vote… You have no say has been an old mantra…
  See how that works
  
  We’re living and pay for it today and many tomorrows to come…
  
  Report this comment
- DadRocked
  Posted on December 20, 2012 at 11:12pm
  cbrown – What a forecaster… But those numbers are just deja vu from the ’08 campaign…
  
  Report this comment
- cbrown
  Posted on December 21, 2012 at 11:47am
  @DadRocked
  
  If my forecast turns out to be true then we will have the following: (end of 4 years)
  
  GDP: 20T, Unemployment less than 5%, Debt/GDP ration: less than 70%, DOW @ 16K, … Even Republicans will call this a stunning achievement for Obama. Most right wing folks are predicting doomsday scenario after 4 years.
  
  Report this comment

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