U.S. GDP Grew at a 5.2% Rate in the Third Quarter, Even Stronger Than Indicated

[hmm37]

The last I checked regarding Q3, was that most of the growth was due to consumption, but most of that consumption was fueled by debt. The prior Q2 consumption was suppressed, and it seems that everyone was forced to restart consumption in Q3.

[BenFranklin100]

This is good news but to sustain (or even increase) this growth, the US needs to address the housing crisis. The housing shortage is best viewed not so much as too few homes overall nationally, but too few homes in job-rich regions where people want to work and live. Hsieh and Morrietti estimated the resulting spatial misallocation of labor lowered aggregate GDP growth by 50% between 1964 and 2009:

https://www.nber.org/system/files/working_papers/w21154/w211...

That is, businesses can’t find the needed local workers to expand, and workers lack access to good paying jobs. Remote work is helping, but still, the problem is estimated to have gotten much worse recently with the surge in home prices over the last 15 years.

TLDR: fix the housing problem, and the economy will be able to sustain higher growth.

[ethbr1]

Additionally, there's the problem of home ownership trending in the direction of exacerbating income disparities, by shifting rental income and property value gains to investors instead of new homeowners.

[rr808]

No its better to enable WFH so people will live where the houses are not where the offices are.

[jeffbee]

There's been some robust discussion about the Hsieh-Moretti result recently. These tweets link to some of it: https://twitter.com/otis_reid/status/1725610847072879030

[AnimalMuppet]

> That is, businesses can’t find the needed local workers to expand, and workers lack access to good paying jobs.

Those are compatible problems. You need more workers to expand? Pay them. You'll get them. The jobs that can't (or won't) pay workers more will be the jobs that don't get filled. Those are the jobs that don't produce enough value to be worth paying decent money, and they are exactly the jobs we want to go unfilled.

[stjohnswarts]

we are not going to sustain 5% growth. 2-3% is about as much as we'll get over the long haul

[elfbargpt]

I saw a story today about a new Chinese cancer drug. It retails for 280 USD in China, and for 8,820 USD in America.

American GDP growing 30x the rate of China's, incredible!

[chii]

> American GDP growing 30x the rate of China

it merely shows how much richer americans are compared to the chinese.

A drug is quite often an inelastic good - someone who is dying will, with very high probability, pay the maximum price they could afford for the drug.

[cced]

Don’t forget credit card interest payments! GDP! Student loan payments! That also goes towards GDP! Great products! 30 years of mortgage interest? You guessed it, GDP!

Copium and GDP for everyone!

Anyone look at PPP or is that metric too inconvenient?

[lr1970]

How the inflation was factored in in calculation GDP growth? If inflation is under-counted than GDP growth will be artificially inflated.

[tim333]

There's been a lot of spending on credit cards and the like but default rates are heading up such that it quite likely won't go on like this that much longer.

https://twitter.com/GameofTrades_/status/1728820920649670923

[akomtu]

That's the chart of top 1% vs bottom 90%:

https://fred.stlouisfed.org/graph/?g=G4YR

[alberth]

This can be explained by the 1st graph in link below.

https://www.pewresearch.org/short-reads/2022/04/20/how-the-a...

Essentially, more people (as a %) are upper income today than ever.

[judge2020]

I do think the Fed's stunt with 2-3% interest rates in 2020-2022 was an effort to further concentrate wealth up the stack. Everyone who could buy/refinance did and will likely stop moving for the foreseeable future, as the same house would cost at least 33% more per month thanks to the higher interest rate alone.

[rblatz]

So more interest rate hikes?

[appplication]

GDP growth is not inflation and not something that needs to be intentionally limited, so not necessarily.

[7e]

We should really be trying to maximize a human happiness metric with the _minimum_ amount of GDP. Quantifying that is a challenge, but if we don’t start, we’ll never get there.

[reissbaker]

I agree with maximizing human happiness, but why with a minimum amount of GDP? What's the goal of having low GDP?

[The28thDuck]

A free gaming console for every household!

[SantalBlush]

The problem is, how do we accurately measure that happiness? Economists would be first in line to use that measure. They know GDP is flawed--unpaid domestic work isn't included, for example--but it's the best they have. There is a ton of econ literature stating as much.

Using dollars spent as a measure of happiness is unfortunately the best we can do (so far).

[jorisboris]

Not sure if correlated to happiness, but I wonder if we can measure the % of population who gives a f** in a country.

In some countries people seem totally disconnected and frustrated (France, Italy come to mind), in others people feel a personal responsibility to make their country a success (Scandinavian countries come to mind)

That to me seems a better indicator for the future

[nradov]

GDP has issues, but happiness isn't a sensible metric to optimize either. If you take heroin then you'll be happy ... for a while.

[Iwan-Zotow]

Less than $150BN until $34 trillion

[andrewmutz]

Amazing that the US economy is growing at a faster rate than the Chinese economy:

https://www.reuters.com/world/china/chinas-q3-gdp-grows-49-y...

[berserk1010]

REAL, unofficial Chinese gdp is probably at near 0% or negative. you don't get 20-30% decline in all metrics like export, import, home price, tax revenue, land value, employment, salaries, etc etc and still have 5% gdp growth.

There's a reason why Xi Jing Ping came begging for relief in APEC San Francisco. Which he got none.

[magnio]

The US reports GDP growth as annualized growth rate, which is the annual rate that would occur if the QoQ rate is maintained for a full year. To get the QoQ rate, we need to roughly divide the rate by 4 (not exact but not far off). This means the US GDP grew 1.3% in the third quarter, matching that of China.

Have to say the concept of annualized GDP growth rate is kinda gobshite. Why would you report that instead of YoY and QoQ rates is beyond me.

[wholesomepotato]

What's amazing about it if the debt increased more in the absolute terms? :D . If I max out credit cards I can at least show spending (GDP) growth at least the same as what I borrowed...

How is it not obvious to everyone that this is the end game? Increasing rates will rapidly increase debt, which increases inflation, which pushes increasing rates ...

[anonylizard]

The bad news is the US has a ballooning, titanic budget deficit that is at wartime levels and is completely unsustainable. Greece too can have booming economies when the government is raking up debt.

The good news is there are genuine, revolutionary innovations in the economy, namely AI. You can't explain away AI as a mirage propped up by government spending.

The entire stock market is held up by the magnificent 7, and these stocks in turn are held up investors' AI dreams.

[somenameforme]

Deficit spending is considered part of the GDP. Print a quadrillion dollars and we could have thousands of percent GDP growth! Part of the reason that GDP can be a highly misleading metric. The article alludes to this in a pretty amusing way:

---

"The U.S. economy grew at an even stronger pace then previously indicated in the third quarter, the product of better-than-expected business investment and stronger government spending.

...

Government spending also helped boost the Q3 estimate, rising 5.5% for the July-through-September period. However, consumer spending saw a downward revision, now rising just 3.6%, compared with 4% in the initial estimate."

---

[huijzer]

> Will Europe ever start asking why it is falling behind the USA?

Compared to when exactly? The USA has played a major role in winning World War II when most Western European countries were occupied (read: lost already). Then, they funded the rise of the United Kingdom, France, and Germany through the Marshall Plan in 1948. Then, the USA pushed against Russia. Honestly, no Western democracy was really interested in becoming part of the Soviet Union, so having some USA backup was not bad. The USA flew circles around the Soviet engineering. Literally actually since the USA spy planes first flew too high for Soviet rockets to shoot down and when that didn't work anymore they flew too fast for Soviet rockets to shoot down. Then the USA military helped invent computer chips during the Vietnam war (a war which on itself is a bit more questionable, but okay), went to the moon first, and invented the internet.

When in this story was Europe not behind the USA?

[apexalpha]

Could it be that little war on the continent that cut off our energy supply while the US is energy-independent and even exporting?

[uoaei]

Your regular reminder that the US is the only country to represent quarterly GDP growth as an annualized rate.

[valzam]

Is this nominal or real GPD? It's not surprising that GDP can grow in a high inflation environment, doesn't mean anyone is better off for it.

[pcurve]

Believe it or not, real GDP. Straight from the BLS.

"Real gross domestic product (GDP) increased at an annual rate of 5.2 percent in the third quarter of 2023 (table 1), according to the "second" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 2.1 percent."

[phonon]

Non-inflation adjusted was 8.9%.

https://www.bea.gov/sites/default/files/2023-11/gdp3q23_2nd....

[The28thDuck]

Nothing quite like closing the article on a zinger.

“ Corporate profits accelerated 4.3% during the period, up sharply from the 0.8% gain in the second quarter.”

Won’t anybody think of the corporations??

[distortionfield]

This is more and more why I think that layoffs are almost viral in nature. I swear to god, it gets in the air sometimes.

[1letterunixname]

I'm betting is mostly due to inflation from the post-pandemic price-profit spiral. At one point, 60% of inflation was due to excessive corporate profits.

[phonon]

This already is the inflation adjusted number. Non-inflation adjusted was 8.9% growth.

https://www.bea.gov/sites/default/files/2023-11/gdp3q23_2nd....

[Racing0461]

Unemployment/GDP/<insert other stat here> are pretty much vanity metrics for the average family.

Doesnt really mean anything if rent is double and gas is 5$ a gal. It's actually even more insulting when the gov is telling you how good you have it.

[SantalBlush]

Look up GDP, unemployment rates, and inflation rates during the Great Depression and then tell us GDP and unemployment are vanity metrics.

I think you actually might not know how good you have it.