3.5 percent third quarter growth in GDP exceeds economists' concensus

[applegrove]

3.5 percent third quarter growth in GDP exceeds economists' concensus

by Meteor Blades at the Daily Kos

http://www.dailykos.com/story/2014/10/30/1340229/-3-5-third-quarter-growth-in-GDP-exceeds-economists-consensus

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Growth of real (inflation-adjusted) U.S. gross domestic product for the third quarter outpaced the consensus of analysts. The Commerce Department's Bureau of Economic Analysis announced Thursday that, on a seasonally adjusted, annualized basis, real GDP grew 3.5 percent in the July-September period, a deceleration from the second quarter's 4.6 percent, but well ahead of the 3 percent that economists surveyed by Bloomberg and the Wall Street Journal had forecast.

The growth made for the best two consecutive quarters since 2003 and the fourth out of the past five in which it has been 3 percent or better. It also confirmed that the first quarter's 2.1 percent contraction was an outlier heavily affected by fierce winter weather in some parts of the nation, something many close observers said was the case when that quarter's results were first announced six months ago. Inflation-adjusted GDP growth is up 2.3 percent over what it was a year ago.

The GDP figures seem to indicate a healthier economy than anything we've seen since 2007. But it's always worth remembering that GDP is a flawed gauge. Distribution of the benefits of growth has been skewed toward the top economic tier for decades, but this has worsened in the past few years. Sentier Research says the average (mean) real household income has fallen 2.9 percent to $54,045 since June 2009, the official end of the Great Recession.

Based on newly released figures from the Social Security Administration, average real pay for 2013 was $43,041—down $79 from the previous year, writes David Cay Johnston. Average pay fell $508 from the 2007 level. On an inflation-adjusted basis, median pay—half of Americans earn more, half earn less—increased $109 in 2013, to $28,031. That put it at $320 below the 2000 median. The starkness of income inequality is reflected in the gains by the one group in Social Security's 60 pay categories that did well: Americans making more than $50 million saw their average pay rise in 2013 by $12.8 million, to $111.7 million.

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