{"id":55475,"date":"2020-10-30T07:20:58","date_gmt":"2020-10-30T12:20:58","guid":{"rendered":"https:\/\/olduvai.ca\/?p=55475"},"modified":"2020-10-30T07:20:58","modified_gmt":"2020-10-30T12:20:58","slug":"no-gdp-didnt-jump-33-1-in-q3-but-7-4-after-plunging-9-in-q2-time-to-kill-annualized-growth-rates-imports-powered-by-stimulus-dragged-on-gdp","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=55475","title":{"rendered":"No, GDP Didn\u2019t Jump \u201c33.1%\u201d in Q3, But 7.4%, after Plunging 9% in Q2: Time to Kill \u201cAnnualized\u201d Growth Rates. Imports, Powered by Stimulus, Dragged on GDP"},"content":{"rendered":"
\n

No, GDP Didn\u2019t Jump \u201c33.1%\u201d in Q3, But 7.4%, after Plunging 9% in Q2: Time to Kill \u201cAnnualized\u201d Growth Rates. Imports, Powered by Stimulus, Dragged on GDP<\/a><\/h3>\n<\/header>\n
\n

GDP back to Q1 2018. Worst ever \u201cnet exports.\u201d The decline in government spending was also a drag. \u201cGDP per Capita\u201d bounced back only to 2017 level.<\/strong><\/p>\n

The spectacular spectacle of an absurd creature called the \u201cannualized\u201d growth rate of GDP appeared again this morning, and the headlines screamed that GDP, adjusted for inflation, surged by a record of \u201c33.1%\u201d in Q3. On the face of it, this would mean that the economy increased by one-third from Q2. But that\u2019s the magic of \u201cannualized\u201d rates. And it\u2019s time to kill them in headline reporting.<\/p>\n

That \u201c33.1%\u201d reflected the jump in Q3 from Q2 but roughly\u00a0multiplied by 4<\/u>\u00a0to produce a theoretical figure of what GDP for the whole year would be if it kept surging four quarters in a row like this. And that\u2019s not going to happen, just like the plunge in Q2 wasn\u2019t actually \u201c31.4%\u201d and wasn\u2019t repeated four quarters in a row. Deeper down in its\u00a0GDP report<\/a>\u00a0this morning, the Bureau of Economic Analysis also reported \u201cnot annualized\u201d figures. And\u00a0not annualized<\/u>, GDP jumped by a record of 7.4% from Q2, after the record 9.0% plunge in Q2 from Q1:<\/p>\n

\"\"<\/p>\n

Both the jump in Q3 and the plunge in Q2 were the sharpest moves ever in the quarterly GDP data, which began in 1947. Before then, there were only annual data.<\/p>\n

And we faced another \u201cannualized\u201d figure in today\u2019s GDP reporting: that GDP in Q3 was $18.58 trillion \u201cannual rate\u201d and \u201cseasonally adjusted\u201d and \u201cin 2012 dollars.\u201d These \u201c2012 dollars\u201d are used to adjust for inflation (loss of purchasing power). And so these terms show how far economic activity dropped in Q2 and the partial bounce-back in Q3. This measure of GDP puts it back where it had first been in Q1 2018:<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

No, GDP Didn\u2019t Jump \u201c33.1%\u201d in Q3, But 7.4%, after Plunging 9% in Q2: Time to Kill \u201cAnnualized\u201d Growth Rates. Imports, Powered by Stimulus, Dragged on GDP GDP back to Q1 2018. Worst ever \u201cnet exports.\u201d The decline in government spending was also a drag. \u201cGDP per Capita\u201d bounced back only to 2017 level. The […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[30521,2214,353,30520,827,4254],"class_list":["post-55475","post","type-post","status-publish","format-standard","hentry","category-economics","tag-annualized-growth","tag-bureau-of-economic-analysis","tag-gdp","tag-real-gdp","tag-united-states","tag-wolf-richter"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/55475","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=55475"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/55475\/revisions"}],"predecessor-version":[{"id":55476,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/55475\/revisions\/55476"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=55475"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=55475"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=55475"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}