Preliminary GDP, Third Quarter

You can read the Bureau of Economic Analysis press release here. Let's look at what's happening.

The bottom line is that real GDP declined in the third quarter (July - September) at an annual rate of 0.3%. This is the first quarterly decline since the third quarter of 2001, when real GDP fell somewhat at a somewhat faster annual rate..

The BEA presents data on changes at an annual rate, but it can be instructive to look at the changes from the a year ago as well.

Compared with the third quarter of 2007, here's what we find:

Real GDP:.............................................+0.81%
(Real GDP has not grown this slowly since the second, third, and fourth quarters of 2001.)

Real Consumption Spending:.............-0.04%
(This is the first time since 1991 that personal consumption spending has declined on a year-to-year basis. Spending on motor vehicles is down 14.7% from a year ago. Gasoline and other motor fuel purchases are also down, by 5.39%; much of this is a result of the recent dramatic declines in fuel prices.)

Real Investment Spending:...............-7.89%
(This is the 8th straight quarter that Investment spending has declined from a year earlier. Investment spending is now down 13% from its peak in the first quarter of 2006. The declines from a year ago are particularly large, one might almost say huge, in business purchases of transportation equipment--down 33%--and in residential construction--down 22%. Overall, spending on motor vehicles, for consumption and investment purposes, is down more than 19%.)

Real Government purchases:.............+3.11%
(This is lead by a 7.75% increase in defense purchases; state and local government purchases have increased by onlly 1.29%.)

Real Exports.:.......................................+6.87%
Real Imports:........................................-3.09%

Any day now, we should hear from the national Bureau for Economic Research that, yes, this is a recession. As if there are any remaining doubters.