3rd Quarter GDP Shows Strong Growth

The revised numbers for the third quarter of 2007 show strong growth in the GDP, 4.9%. Where did it come from? The chart below shows how the economy performed. Notice consumption and exports are the two leading areas of growth. Housing and imports are contracting.

The growth in exports is due in significant part to the "weak" dollar. Looking at these numbers, I question how so many prognosticators can be so sure that Christmas sales will be down and that we are heading into a slowdown.

2 comments:

Bill Linstrom

December 5, 2007 at 3:22 PM

The consumption figure is surprising given the low and falling savings and the pulling back in home values. If memory serves, a lot of the "spending cash" of the last few years has been from home appreciation and refinancing activity. Does the continuing increase in consumption call that theory into question?

das Kapitalist

December 16, 2007 at 11:09 PM

I think it is always speculation about how much of their equity people are spending. But even if true, it may not matter. Consumption never really slows down, even during a recession.