If you were up early this morning, you learned that quarterly US GDP growth was a miserly 2% in Q3 – 2021 which was a disappointment when compared to Q2 -2021 in which GDP grew by 6.7%. The pundit class was expecting about 3%.
This is NOT a fair comparison because Q2 – 2021 is what I call a “dead cat bounce” (imagine a cat thrown from the top of a high rise office building — that’s the dead cat bounce) in which stymied and frustrated economic forces were unleashed resulting in the afore mentioned dead cat bounce.
It is also fair to note that personal consumer consumption grew by 1.6% in Q3 -2021 versus 12% in Q2 -2021.
There is one fact hidden in the bowels of the Q3 – 2021 report that caught my attention. It is this: Dramatically weaker vehicle expenditures subtracted 2.39% from GDP during Q3 – 2021.
Its younger cousin was the assertion that record imports of foreign good resulted in net exports trimming 1.14% from GDP.
Both of these matters are impacted by discrete issues or behavior.
1. The vehicle expenditures — minus 2.39% — were impacted by chip shortages.
2. Net exports — minus 1.14% — were impacted by consumer behavior.
Do the math — if we hadn’t had these two issues, GDP growth would have been a robust 5.53% (2% + 2.39% + 1.14% = 5.53%). Check my math to ensure I got it right. Thank you.
Yes, I know: woulda, coulda, shoulda. Stow it. We’re just chatting here, amigo.
Now, before you order a case of champagne, the good stuff, note that the Atlanta Federal Reserve is forecasting GDP growth of 0.5% next quarter.
But, hey, what the Hell do I really know anyway? I’m just a Big Red Car. Be well.
The whole world needs a good powerwashing.