Third quarter GDP growth was up to 4.1%. Great news, huh? On the surface it is, but dig down into the details and it’s not so great after all.
Earlier today, the Bureau of Economic Analysis surprised everyone by announcing a final Q3 GDP growth of 4.1% compared to 3.6% in the first revision (and 2.8% originally), driven almost entirely by the bounce in Personal Consumption which rose 2.0% compared to estimates of 1.4%. As a result many are wondering just where this “revised” consumption came from. The answer is below: of the $15 billion revised increase in annualized spending, 60% was for healthcare, and another 27% was due to purchases of gasoline. The third largest upward revision: recreation services. On the flip side, the biggest revision detractors: transportation services and housing and utilities. (Read More)
All of that spending on gas and doctors appointments won’t leave much for anything else.
Update: Linked by The First Street Journal – thanks!