Friday, January 29, 2010

GDP Rocks at 5.7%

Lets see how my prediction fared...

  • My Estimate = 5.3%
  • "Professional Economists" Estimate = 4.7%
  • Actual = 5.7%

My predictions as to the drivers of the print...

  • More downward revisions to past quarterly figures, thus my predicted GDP level is not in actuality 5.3% higher than the current (i.e. as of today) Q3 '09 print - WRONG
  • Stimulus induced sectors (think real estate, though autos will be interesting post CFC) making up the majority of the increase with the exception of... - MIXED (both were positive, but not huge drivers)
  • The MASSIVE impact from the inventory rebuild, which I suspect will be revised down in coming quarters as it is realized that the inventory rebuild wasn't all real - CORRECT
  • A VERY low (potentially comically low) GDP deflator, thus nominal GDP won't be nearly as impressive on a relative basis as real GDP - CORRECT, (0.6% - well below the 1.3% expectation) though possibly not "comical"

Source: BEA