GDP rose 4.9 percent in the first estimate of 3rd-quarter GDP. But real disposable income decreased 1.0 percent.
GDP vs GDI Chart Notes
- Real means inflation adjusted
- GDP is Gross Domestic Product
- GDI is Gross Domestic Income
- Real Final Sales is the bottom line assessment of GDP. It excludes inventories which net to zero over time.
Real GDP increased 4.9 percent in the first estimate of 2023 Q3 GDP. Real final sales rose 3.5 percent, the rest is an inventory adjustment which nets to zero over time. Private domestic sales was smaller yet at 3.3 percent.
Gross Domestic Product, Third Quarter 2023 (First Estimate)
- Real gross domestic product (GDP) increased at an annual rate of 4.9 percent in the third quarter of 2023, according to the “advance” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 2.1 percent
- Current-dollar personal income increased $199.5 billion in the third quarter, compared with an increase of $239.6 billion in the second quarter. The increase reflected increases in compensation, proprietors’ income, personal income receipts on assets, and rental income of persons that were partly offset by a decrease in personal current transfer receipts.
- Disposable personal income increased $95.8 billion, or 1.9 percent, in the third quarter, compared with an increase of $296.5 billion, or 6.1 percent, in the second quarter.
- Real disposable personal income decreased 1.0 percent, in contrast to an increase of 3.5 percent.
- Personal saving was $776.9 billion in the third quarter, compared with $1.04 trillion in the second quarter. The personal saving rate—personal saving as a percentage of disposable personal income— was 3.8 percent in the third quarter, compared with 5.2 percent in the second quarter.
- The price index for gross domestic purchases increased 3.0 percent in the third quarter, compared with an increase of 1.4 percent in the second quarter.
- The personal consumption expenditures (PCE) price index increased 2.9 percent, compared with an increase of 2.5 percent. Excluding food and energy prices, the PCE price index increased 2.4 percent, compared with an increase of 3.7 percent.
Real GDI Not Released
Real Gross Domestic Income is not released with the initial estimate of GDP but it appears to be awful noting this line item from the report: “Real disposable personal income decreased 1.0 percent, in contrast to an increase of 3.5 percent [last quarter]”
It appears the major discrepancy between GDP and GDI continues if not strengthened.
The Fed has major problems of its own making but no way to deal with them.
For discussion, please see How the Fed Destroyed the Housing Market and Created Inflation in Pictures
1) Option I : SPX will soon complete five waves down. The trend is down. After a
counter wave up the down turn will resume.
2) Option II : a deeper correction.
3) Option III, bullish : Dow weekly Renko 300pts close. Up from Sept 2022 low to
Nov high A. Mar low : B. // W : July high. X Oct low. // C to 36.5K/37K min
To all the Elon Musk lovers (and haters) who commented about Tesla EV’s yesterday… the federal bureaucrats at the Fish and Wildlife Commission have put a hold on SpaceX launches to investigate the impact on birds and fish.
When SpaceX was launching Starlink in support of Washington DC’s war in Ukraine… no one at Fish and Wildlife cared about the birds or the fish. War is very profitable for Washington DC. Musk put a Tesla into orbit for no apparent reason — seems like a good reason to burn up some wetlands. Musk tested numerous rockets that blew up… that’s the price of progress, no need for bureaucrats to worry about wildlife.
But when Musk started asking too many questions about corruption, when he suggested maybe the bureaucrats did not have the right to censor information? Suddenly the Fish and Wildlife bureaucrats got all concerned.
Lisa, during recessions gov goodies go up. Recession is still a valid option.
Lisa, in the next “correction” the dollar will strengthen and JP will not raise interest rate to 6.5%. The 3M is stalling. There may be a test of the BB, the gaps, or
2019 high. When and how far nobody knows. And if not, or until then, buy silver and gold co for fun.
Raise interest rates to 6 1/2%.
Yes please
I agree, because if they don’t, the heist of inflation will just go on and on.
They need to break the market’s insane assumption we’ll go back to ZIRP.
This ‘pivot’ narrative, aside from being nauseating, is a delusion.
But to be expected when an entire generation has known nothing else but cheap, near free money. Or by making a living from moving digits on your smartphone.
I think I’m on board with the assumption we’ll be having an inflationary decade.
They simply can’t lower interestrates much lower because the everythingbubble will just suck it up.
Housing is already beyond affordable, what do you think will happen if they drop the interestrates to 2%?
They can’t do that and even they know it. 2024 will be the make or break year for sure. The dishonesty and the propaganda coming from the media will reach a boilingpoint up to the election. And then there’s all these wars, chaos and anger.
I wish I could deal with this in any other way, but my default MO is always to seek isolation and a complete blackout from the media.
At some point, I’ll turn this thing off entirely and just focus on reading my books and watching my collection of movies. I’ve learned a long time ago to recognize the value of real, tangible media. Real physical books, dvd’s and blurays.
Because why would I willingly allow exposure to any more of this?
I wish I could say, I’m hopeful and optimistic about the future…but I’m not.
This is the Fourth Turning and everything that’s happening has been spot on.
A time of chaos, violence, hardship and destruction.
Eventually, something else will rise out of the rubble, but it’s not possible to know what, how, when.
“Raise interest rates to 6 1/2%”
per minute.
Until the all the crass theft has been squeezed out, such that a nominal dollar is again 1/20 oz. of Gold, undiluted by the counterfeit theft of the past century and some.
And if per minute won’t do it, try per second. Rinse and repeat. The only thing important being 1/20th of an ounce. Nothing else matters at all, even in the slightest. Just 1/20th. From now until forever.
The Real DPI is up, but real transfer money is down. Those on SNAP may
get other gov goodies : housing for free and ER for free. Both are up. Bidenomic
will not reduce free gov goodies before the Nov 2024 election. Speaker of the house :
what/where do we cut.
Cut interest rates to 3%.
Yeah great and watch the dollar collapse into oblivion
Sorry mate.
The era of free money is over.
Nothing any central bank can do about it anymore….
Looking around with my own eyes I don’t see an issue with less disposable income or putting “food on the table”. I see body compositions that say too much food on the table and people who disposed too much of their income on BS and want more of it.
It’s the carbohydrates in BS that does it.
Just because you see a lot of land whales at Walmart doesn’t mean they are financially OK It means they can’t afford to eat healthy which is much more costly than alot of carbs and fast food
Unless one is accepting handouts one can afford nutritious food (access, however, is a separate and real obstacle for some). Eating food devoid of nutrients and heavy on salt and sugar makes it difficult to reach satiety, let alone maintain a healthy weight.
“Fast food” isn’t inexpensive — one can buy pounds of staples for the price of one combination meal. With shrinkflation the processed/prepared foods aren’t a bargain either.
But they can afford to have the lastest iPhone and have their hair and nails done. You can still buy healthy foods. They need to do more shopping at Aldi and cooking at home.
Try looking at the situation from a different perspective–
Starvation leads to a distended abdomen (bloated stomach). The most common cause of obesity isn’t simply overconsumption, but overeating of “foods” that are loaded with salt and calories and largely lacking nutrients — the people are well-fed, but their bodies bloated and starving.
“the importance of the money supply as a guide for the conduct of monetary policy in the United States has diminished over time”
link to federalreserve.gov
The FED’s Ph.Ds. can’t distinguish between money and liquid assets.
Large CDs should be included in M2. MMMFs should not be included (there’s a difference between theory and practice).
Shadowstats: “Each MMMF share represents a claim to a pro rata share of a managed investment portfolio containing shore-term financial assets, such as high-grade commercial paper, certificates of deposit, and U.S. Treasury notes. Although the value of a share is nominally fixed, usually, at one dollar, the total number of shares owned by an investor (abstracting from reinvested dividends) fluctuates according to market conditions affecting the overall value of the fund’s portfolio”
Our means-of-payment money, debits to deposit accounts, is the “yardstick” by which the liquidity of all other assets is measured.
Spence – I’m curious about “on-the-seas-term” financial assets. You didn’t mention them and that’s in two posts that I know of.
I don’t know why the FED’s numbers are seasonally mal-adjusted. Seasonality varies year after year. But under monetarism, the turns were clearly influenced by required reserves.
There were 6 seasonal, endogenous, economic inflection points each year when required reserves were held. (they may vary a little from year to year):
Pivot ↓ #1 3rd week in Jan.
Pivot ↑ #2 mid Mar.
Pivot ↓ #3 May 5,
Pivot ↑ #4 mid Jun.
Pivot ↓ #5 July 21,
Pivot ↑ #6 2-3 week in Oct.
Under interest rate manipulation, you have a harder time predicting the ebb and flow.
Thanks for the info and your work!
This means absolutely nothing to ordinary people.
GDP isn’t a measure of any kind of standard of living or ‘growth’ with the out of control deficitspending and earthshattering interest expenses on record-levels of debt.
Especially not with real disposable incomes declining and an (manipulated and therefor fraudulent) inflationrate that’s multitudes higher than reported.
And excluding energy, food or shelter from any kind of macro indicator shows you that everything is a big, fat lie.
Even Jeffrey Gundlach (I know, he’s part of the corrupt system) acknowledges that excluding these from statistics is ludicrous and outright fraudulent.
Mike is right, there are discrepancies, but not just in estimates or the inevitable ‘revised’ numbers, but in the gaping chasm between the financial economy and the real economy. Between fake news and reality.
No wonder they’re lying, spinning and manipulating everything, because after deficitspending, helicoptermoney, moneyprinting, unimaginable levels of debt and over a decade of artificially low interestrates (financial repression), it’s the only play they have left.
A tiny sliver of good news is that the majority is slowly waking up to this reality of corruption and manipulation. They’re starting to understand that something isn’t quite adding up. It’s doubtful however that the tiktok generation will act on this realization by stopping to vote for morons in office.
Our means-of-payment money supply has flatlined. But the velocity of circulation has increased.
Dr. Philip George:
(1) “The velocity of money is a function of interest rates” and
(2) “Changes in velocity have nothing to do with the speed at which money moves from hand to hand but are entirely the result of movements between demand deposits and other kinds of deposits.”
Link:
link to fred.stlouisfed.org
Link:
link to fred.stlouisfed.org
Debits to deposit accounts, a “real physical observable and measurable statistic” on the discontinued G.6 Debit and Deposit Turnover release, have accelerated.
Digging into the disposable income details, real wages and salaries were up 0.5%, but real government social payments were down 5.8%. That looks like the culprit in the drop in real disposable income this quarter. Not a bad thing.
That’s a big big drop. Did some big payments related to covid stop recently?
Most of the pain so far seems to be on the low end of the income scale, but with the SP500 down 8% over the past 3 months it could spread.
I continue to be amazed that lag effects aren’t showing up more prominently yet.
The adjustment due to inflation was 3%, probably well understated. Would be interesting to compare to John Williams’ Shadowstats number. Also, federal deficit was $1.7 trillion last fiscal year, that money gets spent mostly on wealth consuming consumption but was not earned. That may be the reason GDI is less than GDP. In any event, the country is going broke fast and GDP is not a good measure of the country’s economic well being.
GDP is for suckers to worry about. Total bread and circuses
Ya nothing is real unless it’s inflation adjusted. Otherwise we could just print up more money and give everyone a million dollars, and we’d all be rich.
Inflation adjusted GDP is shrinking five or fifteen percent per year.
Bush and Trump tax cuts relative to GDP should have done that. Oh, you weren’t watching. Well might not have the deficit if that wasn’t the case.