Happy talk media today are whooping it up because real GDP grew by 2.5% in the third quarter. News flash: it’s the advance GDP estimate, stupid!
Don’t take my word for it. Read the first two paragraphs of the press release from the Bureau of Economic Analysis:
“Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 2.5 percent in the third quarter of 2011 (that is, from the second quarter to the third quarter) according to the “advance” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 1.3 percent.
The Bureau emphasized that the third-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3). The “second” estimate for the third quarter, based on more complete data, will be released on November 22, 2011.”
Prediction: this estimate will be revised downward twice — once at the end of November and a second time just as we’re about to welcome in 2012.