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Thursday, September 4, 2008

Q2 Economy vs. "Similar" 3% - 3.5% Quarters...

The Big Picture with help from Mike Panzner compares the recent 3.3% GDP quarter to similar in size economic expansions:

Our question: Does this 3.3% GDP resemble in most economic data points other, similar economic expansions? Or, is this GDP data, as we have argued, merely the result of a modeling flaw?

With the help of Mike Panzner (Financial Armageddon), we looked at other periods of time when GDP was similar to the Q2 3.3% -- we used any quarter where GDP was between 3.0 - 3.5% as our range. Going back to 1959 (that's all the data available) there were 12 quarters (6.1% of the total) where GDP was greater than 3.0% and less than 3.5%. We then looked at the median Unemployment Rate, NFP (trailing 12 month change), ISM Manufacturing, CPI, PPI, Industrial Production, New Housing Starts, and Consumer Confidence.

What were the results?

Housing starts, payrolls, manufacturing, consumer confidence, industrial production below the median level; CPI, PPI, unemployment above the median level. All the more reason why it likely didn't pass my initial "smell test"...

Source: The Big Picture