Third-quarter G.D.P. growth was revised up modestly, to +2.9% (annualized) from +2.6% in the initial estimate. The details look a bit stronger too: Final sales to private domestic purchasers (a measure of underling demand) now +0.5% annualized, vs. +0.1% in the initial estimate.
On the other hand, Gross Domestic Income (an alternate measure of economic output) rose just 0.3% annualized in Q3. (This is the first estimate for Q3 G.D.I.)
The weakness in GDI in Q3 is notable because for much of this year, economists were pointing to GDI as evidence that the economy was stronger than GDP suggested. But revisions changed that story quite a bit, and now GDI has been weaker than GDP for two straight quarters.
Over the longer term, GDI still shows a higher overall level of economic output than GDP. But the two measures tell a pretty similar story about the past year: Inflation-adjusted growth has ground nearly to a halt over the past four quarters.
On the other hand, headline G.D.P. has been pushed around by volatile trade and inventory components. Domestic demand (shown here in dark blue) has remained positive throughout this year. And today's revisions make it look a bit better than the initial release.
Consumer spending, meanwhile, has remained solidly positive, and much steadier than headline GDP. (And the Q3 figure was revised up.)
As @JordynJournals & @melbournecoal reported over the weekend, consumers have defied expectations by continuing to spend. nytimes.com/2022/11/27/bus…
It's important to keep this all in perspective, however. The economic rebound (whether measured by GDP, GDI, consumer spending...) has been very rapid by historical standards. GDP returned to its prepandemic trend by the end of last year, and even now is only modestly below it.
Lastly, a reminder that *nominal* (non-inflation-adjusted) output is WAY above trend. It's just that a lot of that demand is getting burned off in the form of inflation.
And with that, I leave you until 10 a.m., when we get #JOLTS.
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The U.S. economy slowed in the final three months of the year, but only because the Q3 number was so strong -- the 3.3% growth rate in Q4 was well above expectations and certainly offered no hints of a brewing recession. (Belated charts thread)
This is not a case where the volatile components of G.D.P. made a weak quarter look strong, as sometimes happens. Measures of underlying demand were also very strong.
For all the predictions of a recession, G.D.P. growth actually *accelerated* in 2023, and topped the prepandemic average growth rate as well.
Job openings, quits and layoffs all edged down slightly in November. Consistent with a gradually cooling labor market, but definitely no sign things are falling off a cliff. #JOLTS
Data: bls.gov/news.release/j…
There were 8.8 million job openings on the last day of November. That's down a touch from October, but only because October was revised up. Big picture: Openings are trending down (and quite quickly, at that), but are still high by historical standards. #JOLTS
The number of job openings per unemployed worker actually ticked up in November (because unemployment fell), but ignore the noise. The labor market is becoming more balanced, though the ratio is (again) high relative to the prepandemic period.
The big increase in unemployment is mostly for "good" reasons: More people working, but also more people *looking* for work. Labor force grew by 736,000. Participation rate up by 0.2 percentage points.
U.S. employers added 253k jobs in April, defying (yet again) predictions of a slowdown. The unemployment rate ticked back down to 3.4%.
Data: bls.gov/news.release/e…
Full coverage: nytimes.com/live/2023/05/0…
Notably February and March both revised down, by a combined 149k jobs.
Average hourly earnings stronger than expected -- up 0.5% from March, 4.4% from a year earlier. Consistent with the ECI data showing little slowdown in wage growth.
As expected, the Fed raised interest rates by another quarter point, its tenth increase in a bit more than a year. Rates are now the highest they've been since 2007, before the global financial crisis.
Statement: federalreserve.gov/newsevents/pre…
Full coverage: nytimes.com/live/2023/05/0…
March statement: "The Committee anticipates that some additional policy firming may be appropriate..."
May statement: "In determining the extent to which additional policy firming may be appropriate to return inflation to 2 percent over time..."
In response to question from @jeannasmialek, Powell says that, "A decision on a pause was not made today." But he says the removal of the "anticipates" language was a "meaningful change."