Economic growth for the third quarter, which was estimated at 3.9% a month ago, was revised upward to 4.9% by the government's Bureau of Economic Analysis (BEA). The BEA announcement is here.
This of course explains why a Google News search I just did on "recession" has hundreds and hundreds of articles talking about a possible recession, including 481 in the first 20 listings (/sarc).
Key excerpts from the BEA report (bolds are mine):
The increase in real GDP in the third quarter primarily reflected positive contributions from exports, personal consumption expenditures (PCE), private inventory investment, equipment and software, federal government spending, nonresidential structures, 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.
..... The real change in private inventories added 0.98 percentage point to the third-quarter change in real GDP, after adding 0.22 percentage point to the second-quarter change. Private businesses increased inventories $32.9 billion in the third quarter, following an increase of $5.8 billion in the second quarter and an increase of $0.1 billion in the first.
Ever since the fourth quarter of 2006, when there was a big downward revision to GDP because of inventory reductions, I have been wondering when the reverse was going to occur, because it almost had to. Now it has.
Two tidbits you may not see reported elsewhere (source info from BEA is here):
- If it holds, and I believe it will, this is the best quarter since 3Q03, and the second best since 2Q-2000.
- Again if it holds, the combined 2nd and 3rd quarter total of 8.7% (after the 2nd quarter's 3.8%; quarterly percentages are presented in annualized form) is the highest since the 3Q03 and 4Q03's 10.2%. 2Q03 and 3Q03 were a combined 11.0%.
I don't expect this revision to break out of the business pages. The expectations that built up in the past week were barely news. 5.0% would have been tougher to ignore. We'll see.
Cross-posted at BizzyBlog.com.
