GDP rose 4.9 percent in the first estimate of 3rd-quarter GDP. But real disposable income decreased 1.0 percent.

Real GDP from the BEA, chart by Mish

GDP vs GDI Chart Notes

• Real means inflation adjusted
• GDP is Gross Domestic Product
• GDI is Gross Domestic Income
• Real Final Sales is the bottom line assessment of GDP. It excludes inventories which net to zero over time.

Real GDP increased 4.9 percent in the first estimate of 2023 Q3 GDP. Real final sales rose 3.5 percent, the rest is an inventory adjustment which nets to zero over time. Private domestic sales was smaller yet at 3.3 percent.

Gross Domestic Product, Third Quarter 2023 (First Estimate)

• Real gross domestic product (GDP) increased at an annual rate of 4.9 percent in the third quarter of 2023, according to the “advance” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 2.1 percent
• Current-dollar personal income increased $199.5 billion in the third quarter, compared with an increase of $239.6 billion in the second quarter. The increase reflected increases in compensation, proprietors’ income, personal income receipts on assets, and rental income of persons that were partly offset by a decrease in personal current transfer receipts.
• Disposable personal income increased $95.8 billion, or 1.9 percent, in the third quarter, compared with an increase of $296.5 billion, or 6.1 percent, in the second quarter.
• Real disposable personal income decreased 1.0 percent, in contrast to an increase of 3.5 percent.
• Personal saving was $776.9 billion in the third quarter, compared with $1.04 trillion in the second quarter. The personal saving rate—personal saving as a percentage of disposable personal income— was 3.8 percent in the third quarter, compared with 5.2 percent in the second quarter.
• The price index for gross domestic purchases increased 3.0 percent in the third quarter, compared with an increase of 1.4 percent in the second quarter.
• The personal consumption expenditures (PCE) price index increased 2.9 percent, compared with an increase of 2.5 percent. Excluding food and energy prices, the PCE price index increased 2.4 percent, compared with an increase of 3.7 percent.

Real GDI Not Released

Real Gross Domestic Income is not released with the initial estimate of GDP but it appears to be awful noting this line item from the report: “Real disposable personal income decreased 1.0 percent, in contrast to an increase of 3.5 percent [last quarter]”

It appears the major discrepancy between GDP and GDI continues if not strengthened.

The Fed has major problems of its own making but no way to deal with them.

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