GDP numbers announced last week show 3rd quarter growth at 2.5% rate. Wow.
That is not exactly the kind of growth you would expect if the economy were starting to falter in advance of slipping into a double dip recession. Maybe we are not going to slip into a double dip. I discussed this idea earlier.
Mark Perry points out an intriguing point in the title to his post: Real GDP Recovers to Above Its Pre–Recession Level. Hmm. The real GDP has been going up since the middle of 2009. It is now past the previous peak.
On the other hand, I have grown skeptical of the first release of the GDP numbers. There is an initial release which is then followed by two revisions.
In the last 16 quarters, the second release showed a reduction 11 times, an increase 3 times, and no change 4 times. Cumulative change is a drop of 5.6% with an average drop of 0.31% per quarter. In the audit world we would call that a management bias in estimating.
I don’t understand the numbers that well, and haven’t accumulated enough of the data to interpret this further. I’ll leave that in the capable hands of Mr. Perry. But I do know to be skeptical of the first release.
However, the 2.5% increase is good news. Not quite an indication of a solid recovery, but still better than the last several quarters.