Q3 GDP Maintains Growth… The Recession Has To Wait

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The news this morning is dominated by European bailout news, but we have a “recession watch” figure today.  This morning was the Gross Domestic Product for the third quarter in the United States.  This is the first preliminary report on Q3-2011 and we get two revisions ahead.

The headline GDP in the third quarter was +2.5%, slightly under the 2.7% projected by Dow Jones.  This compares to +1.3% in Q2-2011 and to +0.4% in Q1-2011.  If you look at the PCE Price Index, that came to +2.4%.

The third quarter was helped by consumer spending as consumers continued to spend.  Real final sales, backing out private inventories was +3.6%.

We have seen several economists raise growth targets during the recent weeks despite a deluge of bad data and despite what had been awful news out of Europe, China, and India.

Could it be that there will be no double-dip recession?  It seems possible now and maybe the soft landing is just growth so slow that it still feels like a recession because so many things have not improved.  Housing and employment remain in the tank.