Since we’re in the midst of a week where many political pundits are acting as though performance against expectations is the measure of success, they should be jumping up and down with joy that the Commerce Department’s initial estimate of GDP growth in the third quarter of this year came in at an annual level of 2.8%, well over the consensus prediction of 2.0%.
As always, the experts are killjoys, per this WaPo report from Ylan Mui:
[M]uch of that gain was driven by a buildup in inventory as businesses watched sales slacken. Consumer spending tapered off during the third quarter as many households faced uncertainty heading into the government shutdown….
Alan MacEachin, corporate economist at Navy Federal Credit Union, said he is lowering his forecast for job creation to just 110,000 for October based on the GDP report.
“It is deceptively weak,” he said of the economy. “You drill down below the surface, and you can see what’s going on.”
MacEachin’s buzzkill assessment is a reminder that tomorrow’s October Jobs Report will reflect the government shutdown (though only in part, because furloughed government workers will be considered employed in terms of measuring net job growth). The bigger question in elite opinion is whether economic observers react with greater anger at the shutdown screwing up a fragile but promising recovery, or conclude the recovery wasn’t much to begin with.