Thread by @bencasselman

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.