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
I'm confused - in the post you link to about inventory correction not being real (because it was due to inventories merely going up in price (nominal gain) as opposed to real gain) you state that because it was a nominal gain it won't affect Q4 GDP
ReplyDeleteIn this post though (and in the GDP print) it clearly appears to be affecting Q4 GDP.
Is the difference between the two stances the reason it will you hypothesize that Q4 GDP will be revised lower (e.g. "they" will realize it was just a nominal gain and deflate it out), or ?
Thanks!
it is indeed, but they can't be THAT ignorant (or can they). i will try to build this out in a post over the weekened comparing what we saw on a stand alone basis in wholesale and business inventories, with what we're seeing in the GDP figure.
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