Q3 GDP Growth, Not So Much

The BEA's advance estimate of third quarter GDP growth came in at a 1.6 percent rate. Blessedly not the start of a recession but not a good omen, considering the declines in housing have accelerated and this number was bolstered by temporary increases in vehicle sales that are unlikely to persist. Key paragraphs from BEA:

The deceleration in real GDP growth in the third quarter primarily reflected an acceleration in imports, a downturn in private inventory investment, a larger decrease in residential fixed investment, and decelerations in PCE for services and in state and local government spending that were partly offset by upturns in PCE for durable goods, in equipment and software, and in federal government spending.

Final sales of computers contributed 0.10 percentage point to the third-quarter growth in real GDP after contributing 0.04 percentage point to the second-quarter growth. Motor vehicle output contributed 0.72 percentage point to the third-quarter growth in real GDP after subtracting 0.31 percentage point from the second-quarter growth.

For online commentary, go read the analysis by Nouriel "If you're gonna be a bear, be a grizzly" Roubini, who has been predicting this for a while.