Justin Fox The Curious Capitalist
 
What that GDP report really meant (not much)
As you've probably heard, the U.S. economy grew at a 1.6% annual, inflation-adjusted crawl in the quarter that ended Sept. 30.

Except that, well, it probably didn't. It was the "advance" estimate of gross domestic product that the Commerce Department's Bureau of Economic Analysis released today. On Nov. 29 we'll get the "preliminary" estimate and then, on Dec. 21, the "final" one. Only that won't be final, either, because in 2008 the BEA's once-every-half-decade revision of the National Income and Product Accounts will change all the numbers yet again.

All this uncertainty and revision comes because GDP numbers are built upon vast edifices of educated guesswork that only get filled in with real data months and years down the road--and even then there remain big questions about what we count and how we count it.

So why exactly do we pay attention to these numbers? In part because a lot of people are grasping for any sign whatsoever as to whether the slumping housing market is going to take down the rest of the economy.

For NYU economics professor Nouriel Roubini, who has been the most noteworthy, outspoken, and (so far) correct bear among economic forecasters over the past year, today's GDP release was occasion to gloat a little. Recession, he predicts, is just around the corner.

For most of the forecasters on Wall Street, who as a group are of the opinion that the economy has so much strength outside of housing that we'll muddle through without an outright downturn, the report has occasioned a few downward adjustments to forecasts and a lot of statements that we will nonetheless muddle through without an outright downturn.

Who's right? I have no idea. What I'm almost certain of, though, is that the economy did not in fact grow at a 1.6% pace in the third quarter.
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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.