Q32009 advance is out, and the claim is 3.5% (real, annualized) growth for July-August 2009.
I think this number will get revised downward during next two refinements. I’m expecting a final that’s between 2.5 and 3%.
In the numbers, PCE was up, PDI was up, Import/Export was up, and government spending was up. While a lot of PCE was auto sales (read Cash for Clunkers) the overall without including auto sales was still up. There were some declines in PCE. In PDI commercial real estate declined but it was only 2.5% compared to the previous quarter’s 9.6% — that seems to be bottoming as well. In real import/exports it’s worth noting that the overall increased despite a 16.4% increase in imports. (Increasing imports decreases GDP, increasing exports increases GDP. We had a big increase in exports.) Finally in government, states had a decrease of 1.1% and Feds increased by 8.4%.
Fourth quarter guess for me right now is that PCE will continue to be up, just not as sharply. I think PDI has turned the corner and will be up as well. Imp/Exp is shaky – as our economy heats up we’re going to buy more oil, and oil has been increasing in price again. In the government area, I think we’ll see states come very close to zero while the Fed will spend again (especially as I expect Obama to send more to Afghanistan. This last isn’t that good a deal economically, but nations do not live by economics alone.) Pencil it for a 2-2.5% real annualized gain and I’ll look harder as we approach Thanksgiving.
We aren’t out of the hole. We’ve just quit falling. We’re currently on track for a jobless recovery with GDP running at +2.5% (give or take a bit) for all of 2010. My personal belief is that we’ll see three stimulative effects push us over the magic 3% line which results in jobs recoveries as well, but only one of those is currently locked. The locked effect is the parts of the stimulus bill that weren’t to take effect till 2010. The two anticipated, as I’ve said before, are the Health Care bill and a Son of Stimulus that is probably going to be narrowly focused (for congress, that is) on job sustainment and recovery. If all three are in effect by January I’ll anticipate a 2010 GDP growth of over 3.5% with unemployment declining to under 7% by next December. Please note the “if”. If health care and Stim Jr. don’t pass we’ll see ~2.5% through 2010 and unemployment will probably remain over 9% for the same time period.