Real GDP data from the BEA via St. Louis Fed, chart by Mish

Gross Domestic Product, Third Quarter 2022

This morning, the BEA released its Advance Estimate of GDP for the third quarter of 2022.

Key Points 

• Real gross domestic product (GDP) increased at an annual rate of 2.6 percent in the third quarter of 2022. In the second quarter, real GDP decreased 0.6 percent.
• The increase in real GDP reflected increases in exports, consumer spending, nonresidential fixed investment, federal government spending, and state and local government spending, that were partly offset by decreases in residential fixed investment and private inventory investment. Imports, which are a subtraction in the calculation of GDP, decreased.
• The increase in exports reflected increases in both goods and services. Within exports of goods, the leading contributors to the increase were industrial supplies and materials (notably petroleum and products as well as other nondurable goods), and nonautomotive capital goods.  
• The upturn primarily reflected a smaller decrease in private inventory investment, an acceleration in nonresidential fixed investment, and an upturn in federal government spending that were partly offset by a larger decrease in residential fixed investment and a deceleration in consumer spending. Imports turned down.  

GDP Deflators 

• GDP: 4.1%
• Gross Domestic Purchases: 4.6% 

GDP in Billions of Dollars 

Real GDP data from the BEA via St. Louis Fed, chart by Mish

Real Gross Domestic Income (GDI) is not available in the advance report. 

Real GDP Trends

Real GDP data from the BEA via St. Louis Fed, chart by Mish

Note that GDP has not returned to the previous trendline and won't. Another recession is totally baked in the cake.  

Government spending won't come to the rescue again. 

Very Weak Data 

• Real Final Sales were 19,633 in the second quarter of 2021 
• Real Final Sales were 19,897 in the third quarter of 2022
• That's only a 1 percent rise in 5 quarters despite a 2.6 percent annualized gain in this quarter.  

GDPNow Final Forecast

GDPNow data from the Atlanta Fed, chart by Mish

Yesterday I noted A Huge Surge in Government Spending Drives Up GDPNow Forecast

Kudos to GDPNow

• GDPNow: 3.1 Percent vs BEA 2.6%
• GDPNow RFS 3.1 Percent vs BEA 3.3 Percent
• GDPNow RFS Domestic 0.5 Percent to BEA 0.8 Percent
• GDPNow RFS Private Domestic 0.2 Percent to BEA 0.1 Percent 

That's a remarkable performance given huge swings in government spending in September and a surge in petroleum exports.

The US consumer weakened. Real final sales to private domestic buyers was a mere 0.1 percent annualized. 

Recession Postponed 

The recession was postponed, but not for long.

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