GDP for 3Q 2010

The GDP number out today of a 2% growth shows an economy growing at a slightly greater than last quarter’s 1.7%. But this is still weak relatively weak growth (see stories in the New York Times, Wall Street Journal and Washington Post.
And the numbers are subject to revision as the trade data is a month behind. The advanced estimate assumes a worst trade picture this quarter compared to last quarter. Given the last two months data (see previous postings), that is a safe assumption.
Still, as I’ve state before, we still have a lot of work to do to improve the numbers (see earlier posting). In the meantime, we should remember that the data always contains an element of uncertain and should be treated accordingly.

One thought on “GDP for 3Q 2010”

  1. Remember that GDP figures include increases in Government borrowing. To my mind we have ended up with a situation that maintenance of GDP has become reliant on Government increasing its borrowing.
    The position should be one of temporary borrowing by Government followed by repayment or keeping borrowing as the same ratio (proportion of GDP) – in theory Eurozone members have this as a condition of being members (but many are ignoring this requirement)
    In reality borrowing as a proportion of GDP is rising in many parts of the world and readers might like to reflect on what the reported GDP figures actually mean….
    If you would like to worry more about this look at the Debt Clock


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