Government spending added 0.85 percentage points. Kudos to Pat Higgins at GDPNow for once again hitting the mark on GDP this quarter. 
GDI is not available in the initial (advance) GDP estimate for each quarter.
Today the Advance Estimate of GDP from the BEA is an increase of 2.8 percent at an annualized quarterly rate.
Key Contributions to GDP
- PCE Goods: +1.25
- PCE Services: +1.21
- Nonresidential Fixed Investment: +0.46
- Residential Fixed Investment: -0.21
- Change in Private Inventories: -0.17
- Net Exports: -0.56
- Government consumption expenditures and gross investment: +0.85
Real GDP, Real Personal Income, Real GDI 2024 Q3 Advance
Real Personal Income rose from 19,737 to 19,825 by my calculations. That’s a quarterly gain of 0.44 percent (not annualized).
GDP-GDI Gap Shrinks
The enormous gap between GDP and GDI that I had been discussing has vanished. This happened in the third revision to the second quarter 2024 data by the BEA, not this month.
Annual Update of the National Economic Accounts
Today’s release presents results from the annual update of the National Economic Accounts (NEAs), which include the National Income and Product Accounts (NIPAs) and the Industry Economic Accounts (IEAs). The update includes revised estimates for the first quarter of 2019 through the first quarter of 2024 and resulted in revisions to GDP, GDP by industry, GDI, and their major components. The reference year remains 2017.With today’s release, most data are available through BEA’s Interactive Data application on the BEA website (www.bea.gov). Refer to “Information on 2024 Annual Updates to the National, Industry, and State and Local Economic Accounts” for the complete table release schedule and a summary of results through 2023, which includes information on methodology changes. A table showing the major current dollar revisions and their sources for each component of GDP, national income, and personal income is also provided. An article describing the update in more detail will be forthcoming in the Survey of Current Business.
The updated estimates show that real GDP increased at an average annual rate of 2.3 percent from 2018 to 2023, 0.2 percentage point higher than the previously published estimate. Over the same period, real GDI increased at an average annual rate of 2.2 percent, 0.4 percentage point higher than previously published. The average of real GDP and real GDI over the same period was 2.3 percent, 0.4 percentage point higher than previously published.
Many of us expected GDP to be revised lower, not income higher. More revisions are certain, direction unknown.
The Final GDPNow forecast for 2024 Q3 Is 2.8 Percent
Yesterday, I noted The Final GDPNow forecast for 2024 Q3 Is 2.8 Percent.
Pat Higgins, GDPNow creator at the Atlanta Fed has had a hot hand for about two years now.
Congrats!
Higgins will produce an initial forecast for 2024 Q4 shortly.
Here are some great points made by that WR guy:
“Tariffs are a direct tax on the profit margins of foreign producers and US importers. And maybe they can pass some of them on to end users, but that’s not guaranteed if local competition keeps prices down, in which case tariffs are just a tax on foreign producers and US importers. And this country needs to raise taxes, and tariffs is about the best way of raising tax receipts, much better than taxing incomes. With taxes you have to choose the lesser evil, and tariffs are the lesser evil.”
Absolutely fantastic points. How far will Trump be able to take Tariffs? I have no idea, but let’s take the Apple iPhone as our best example.
Can anyone guess how much margin Apple has on these things that could be raised by tariffs? Billions come to mind.
The time has long past for America to level the playing field. The main thing is to get the policies & tariffs right. The only way you find that out is to Just Do It, with some common sense, of course.
But where are the bullet points explaining why we’ve been in a recession for six months?
Y’all need to study history a bit more. Reported initial GDP was positive for the first 9 months or so of the Great Recession.
The people who measure GDP don’t do it accurately enough in real-time for anyone to spot recessions.
This is part of why, whenever there’s a recession, 90% of the economic community is blindsided. They prove themselves idiots over, and over, and over again.
The indicators Mish is using have actual track records of detecting incipient recessions. Not GDP.
Good article Mish.
Yep. The economy continues to move along slowly. I was not surprised by the GDI revisions or the GDP calculations.
This is a great economy for those of us who focus on taking advantage of the opportunities it provides rather than wasting most of our precious time on politics.
This blog attracts a lot of dumb f*cks. Maybe they will disappear after the election is over and we can then focus on more important topics.
Well, *dryly*, that’s some good news at least, on the economy. So why does the average voter feel like he’s not doing so good economically?
If you’re living in an apartment that’s not rent-controlled, or even if it is, if you’ve moved to a new apartment, you’re probably paying most of your paycheck to your landlord and the food store. As you hang with your buds, bitching and complaining about life, you ask yourself where’s this 2.8% economy growth everyone keeps talkin’ about — oh yeah, it’s in New York City on Wall Street where the bull market keeps pawing at the ground, threatening the bear.
Kamala Harris doesn’t seem to be addressing herself to this voter. Maybe because she said she wouldn’t “do a thing” differently in her time with the Biden albatross (around her neck). She comes across as a smarmy progressive with a disdain for the Little People.
(You can read more of my writings at dark-dot-sport-dot-blog where the -dot- represents periods …)
The O/N RRP facility is almost empty. Contrary to the FED, this is not a liability swap. No, draining the O/N RRP facility increases the supply of loanable funds. This should pressure interest rates higher.
On the other hand, there is going to be an oil glut:
World Bank expects oil glut to cause commodity price slump
Yes, and ADP job numbers are up also along with consumer spending.
Maybe the FED should raise the interest peg back up by 50 basis points at the next meeting?
Yes Jojo. We agree on something.
Oringinally I thought a good part of tax money was thrown in the garbage but with the GDP figures out good yet public confidence in the dumps, I realize that all the money was thrown to the non-garbage.
Bibi peeled Iran’s air defense. He destroyed four S-300. Iran’s Bavar-373 is better than S-300. If Iran cont to Martingale: 100, 200, 500/600 ballistic missiles, Israel might attack Iran’s nuke and oil facilities. It will stop the nuke proliferation. Otherwise every mini power and their proxies will be equipped with nukes, building a nuke bubble. It will invite preemptive strike. It will send the world to the dark age.
Since Q2 2020, GDP is rising vertically, up 50% in four years, from $20T to $30T. According to the Dow theory it cannot last.
At least voter ID #159607018 voted multiple times in the same county.
Did not add to carbon footprint by driving all over Michigan.
reference to Midnight
Mish with his head in the sand denying the cheating that takes place in the same spots every election.
You. Have. No. Proof.
Shut your stupid cakehole.
Party of hate.
Party of bullshit.
29 votes from one voter so far in MI. But fraud doesn’t happen
https://x.com/mdeperno/status/1851652442288464365
Link: George Garvey:
Deposit Velocity and Its Significance (stlouisfed.org)
“Obviously, velocity of total deposits, including time deposits, is considerably lower than that computed for demand deposits alone. The precise difference between the two sets of ratios would depend on the relative share of time deposits in the total as well as on the respective turnover rates of the two types of deposits.”
Transaction accounts still turn over, are debited, much faster than savings/investment type accounts. The ratio of transaction accounts to savings/investment type accounts has doubled. Shadow stats claims this is a flight to liquidity.
American, Yale Professor Irving Fisher – 1920 2nd edition: “The Purchasing Power of Money”:
“If the principles here advocated are correct, the purchasing power of money — or its reciprocal, the level of prices — depends exclusively on five definite factors:
…“In my opinion, the branch of economics which treats of these five regulators of purchasing power ought to be recognized and ultimately will be recognized as an EXACT SCIENCE, capable of precise formulation, demonstration, and statistical verification.”
Trump Is Not Thoughtful Enough To Be a FascistThe Republican presidential candidate’s views do not reflect any unifying principle other than self-interest.https://reason.com/2024/10/30/trump-is-not-thoughtful-enough-to-be-a-fascist/
So now he’s not a fascist? I’m so confused Robbie.
Robbie is transitioning …let’s be supportive.
Trump = self-interest, duh! Trump = egomanic, duh!
Substitute “any politician” for “Trump” … still true.
Trump’s support crew (outside his family) are not stupid/blind … their self-interest will work against his. His family is a problem hopefully a minor one.
US economy growing despite voter angsthttps://www.bbc.com/news/articles/cd0gelezlevo
72 percent say we are going in wrong direction. They must all be lying.
You keep citing the same BS. The percentage for that specific Gallup poll question has been similar for decades, not just now. And the related Gallup poll for individuals is 80%+ for people evaluating their own personal lives. They are not lying. They love their own lives; they just hate not being able to interfere with the lives of others LOL
Ah, the state news source of the former colonial masters – a reputable one indeed!
Way to go, America. You’ve been increasingly producing goods and services (even after accounting for inflation) for 10 straight quarters, buying those goods and services and then some (with imports), and employing more and more Americans with your purchases. You’re simply the best!
“even after accounting for inflation” I wonder what the gdp would be if it reflected the actual rate of inflation, not the bullshit the politburo publishes.
Say 2-3% under-reporting per year … that’s 50% reduction in living standards roughly each generation (24-36 years).
Yeah, the vast majority of us are definitely worse off in living standards by half than our parents LOL
What a rube. As Mish has said in the past, math is hard; so just leave it to others if you want. So you can live in your fantasy world while the rest of us keep working and producing
Bring back the $12 2x4s
Another poster with a math comprehension issue. Sure no one likes inflation; and that was (previously) included in the ‘$12’ 2×4 price you’re complaining about. But they don’t cost the high price any more. And the actual number of 2x4s (REAL GDP) is higher than it was before. So we want more 2x4s, we buy more, and we produce more.
That’s a good thing. I understand it does not fit your own political narrative. But real GDP increasing is just a statistical fact; it’s not political
This is a post-2008 world.
GDP is what you make it.
Literally, not productively.
It’s flawed but can you come up with a better way of measuring the economic wealth of a country?
Yes, but it will take me some time.
Supportive donations are appreciated and would speed the task…
Not relying on it as Holy Mary when making economic decision would be a start.
Clearly, there is need for GDP per debt measure.
The SC just sided with Virginia and against the Biden/Harris regime in disallowing non-citizen voters on voter rolls. But of course, that doesn’t mean the B/H regime wanted to cheat or ever has (sarc). The three liberal (non-)justices voted for keeping the criminals on the rolls. That’s an impeachable offense imo.
Removal should be simple/non-controversial — why they got registered is the bigger question. These people were registered in error under the Clinton “Motor Voter Act” (aka NVRA).
This Quote from Reuters regarding the case:
Of the roughly 1,600 people removed from Virginia’s voter rolls since Aug. 7, about 600 had indicated to the DMV that they were not U.S. citizens.. The other 1,000 had presented documents to the DMV showing they were noncitizen residents, and were later identified as noncitizens through a federal database, the state’s filing said.
Those who were flagged for removal were first notified and given 14 days to affirm their citizenship before being taken off Virginia’s list of registered voters, the state said.
Does it make you wonder why the Motor Voter Act was passed over three decades ago, but VA is just now ‘clearing the voters’?
Assume everything is rigged until after the election
… said the loser-to-be.
Everything is rigged.
FIFY
So how much of this growth was purchased by government expansion? Government does not contribute to wealth creation, rather redistributes taxed or borrowed wealth. The part of government GDP contribution that is debt fueled is not countered balanced with consideration of the debt.
We’ve bought 2.8% GDP growth with a federal deficit of 7% of GDP.
yep! I look wealthy too with my new truck … and 10 year payment plan.
Overall debt of >120% of GDP…and rising .. headed to Japanese style stagnation with continued declining living standards….covered with mis-informed inflation figures.
I dunno about not contributing to wealth creation.
I see so very many of those elected to self-sacrificing government positions retire as multi-millionares.
At the expense of people who are actually creating wealth- the tax payers.
Mish, Any idea what would happen to GDP if Elon, in my wildest dreams, cuts the $2 trillion deficit out of next year’s budget?
The economy would crash then recover spectacularly after a long lag. We would be better off IF we could get through initial pain. But this is all fantasy talk. Will not happen.
It’s fun to fantasize, isn’t it?
Vote for Harding, he did that.
Interesting that following the significant deficit spending in recession years 1917 through 1919 by decreasing federal government spending from $18.493 billion in 1919 to $6.358 billion in1920, the roaring twenties commenced shortly thereafter. The roaring twenties ended with onset of the great depression and government had deficits every year through WW2 and we wallowed in the depression the entire time. This suggests that federal deficit spending to end economic downturns is not effective.
Data from https://www.whitehouse.gov/omb/budget/historical-tables/
Data is in table one of the link above
Interesting that the Tech Boom was shortly after the “peace dividend” of 1992-1996 … freeing up talent from weapons-industry to other pursuits like wireless/networking and Wall Street Quants. (caveat: correlation is not causation)
Unfortunately, releasing all goberment funded DEI leaders and Environmental Studies majors into the free market will just raise unemployment (unless they can hang dry wall).
EZ PZ. Just eliminate Social Security, Medicare and Medicaid. Done.
So much for that recession you declared. I have learned my lesson about the permabears. Mish, I have to hand it to you: You’re the best permabear I’ve ever seen, but it’s what you are.
Happy days are here again!
I am not garbage.
You are feces.