We all breathed a sigh of relief when yesterday’s advance estimate of
U.S. Q3 GDP showed the economy growing at an annual rate of 2 percent.
In normal times, 2 percent would be a disappointment; it is a sign of
how far we are from normal that we can only think how much worse it
could have been.
In fact, it could yet be worse. The advance estimate of real GDP is
notoriously subject to revision. The BEA tells us that the average
revision, without regard to sign, is 1.3 percentage points from the
advance to the latest estimate. A downward revision of no more than
average size would put us at 0.7 percent growth, well below the anemic
1.3 percent reported in the third estimate for Q2. Of course, an upward
revision is, statistically, equally likely, so let’s hope for the best.
Even as we accept 2 percent growth with relief, there are some
discouraging details deeper in the tables that the BEA attaches to its
press release. >>>Read more
Follow this link to view or download a classroom-ready slideshow with charts of the latest GDP data
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