US GDP Improves Fractionally, But Slightly Below Mainstream Forecasts

The 3rd GDP estimate for Q3 came in at 2.6 percent — a small increase over the previous estimate of 2.5 but slightly below the consensus expectation of 2.7. Here is an excerpt from the full BEA announcement:

Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 2.6 percent in the third quarter of 2010, (that is, from the second quarter to the third quarter), according to the “third” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 1.7 percent.

Here’s a look at GDP since Q2 1947 together with the real (inflation-adjusted) S&P Composite. The start date is when the BEA began reporting GDP on a quarterly basis. Prior to 1947, GDP was reported annually. To be more precise, what the lower half of the chart shows is the percent change from the preceding period in Real (inflation-adjusted) Gross Domestic Product. I’ve also included recessions, which are determined by the National Bureau of Economic Research (NBER).
GDP Overview

Here a close-up of GDP alone with a line to illustrate the 3.3 average (arithmetic mean) for the quarterly series since the 1947.
GDP Since 1947

Here is the same chart with a linear regression that illustrates the gradual decline in GDP over this timeframe. The latest GDP number is 0.4 above the approximate 2.2 of the regression at the same position on the horizontal axis.

GDP Since 1947 with Regression

Doug Short Ph.d is the author of dshort.com.

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