Liveblogging GDP 2008 Q3

Final Update 13.40GMT / 0940EDT

Sharemarkets are up about 3%.

Mrs OSO just visited me a few minutes ago and reminded me that while it is lunchtime in the UK and morning in America, it is past midnight here in Australia. Good night all. I hope someone was reading all this!

Hot day tomorrow in Newcastle, NSW. 36°C ( 96.8°F) predicted.

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Update 13.35GMT / 0935GMT

Just did some more reading of the official release. Residential spending (ie the subprime bubble) has been declining rapidly since 2006 Q2. That's 2½ years.

More than that, I've just done some basic maths work on each quarter's decline in residential spending. If we take 2006 Q1 to be an indice of 100, the 2008 Q3 comes out at 15.85. This is based upon figures from table 8 of the official release. This means that residential spending has declined by, what, 84.15% since 2006 Q1. Is that right? Or have I got my sums wrong?

I got my sums wrong. If we take 2005 Q3 to be an indice of 100, 2008 Q3 comes out at 58.27. This means residential spending declined by 41.72% over the last 3 years.

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Update 13.16GMT / 0916EDT

Calculated Risk has a post and discussion about this GDP release. CR will post the usual graphs anon. CR points out that consumer spending has declined for the first time since 1991.

Some classic comments:

At least they're not going down the same road as the American consumer did, funding their spending orgy through a massive buildup of new debt ... oh, wait.
- Mook

My goodness, we might be in a recession with another quarter of results like this.
- Blackhat

those numbers will look rosy when we compare them to Q4
- 12th Percentile

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Update 13.06GMT / 0906EDT

Market futures are up. The -0.3% figure was better than the entrail readers expected.

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Update 13.03GMT/ 0903EDT

Public Debt as percentage of GDP has dropped slightly to 43.31%. My debt watch on Wednesday had it at 43.73%. This is because of an increase in nominal GDP. Don't worry doomers, the number will get higher by and by.

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Update 12.59GMT/ 0859EDT

Roytas:

Continuing job losses coupled with declining gains from stocks and other investments have put consumers under severe stress. The GDP report showed that disposable personal income dropped at an 8.7 percent rate in the third quarter - the steepest since quarterly records on this component were started in 1947 -- after rising 11.9 percent in the second quarter when most of economic stimulus payments still were flowing.

...

Businesses also were clearly wary about the future, cutting investments at a 1 percent rate after boosting them 2.5 percent in the second quarter. It was the first reduction in business investment since the end of 2006. Inventories of unsold goods backed up at a $38.5-billion rate in the third quarter after rising $50.6 billion in the second quarter.

Prices were still rising relatively strongly in the third quarter, with the personal consumption expenditures index up at a 5.4 percent annual rate, the sharpest since early 1990. Even excluding volatile food and energy items, core prices grew at a 2.9 percent rate, up from the second quarter's 2.2 percent rise.

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Update 12.55GMT/ 0855EDT

Bloomberg:

The economy suffered its biggest decline since 2001 in the third quarter, ushering in what may be worst recession in a quarter century and boosting the chances of Barack Obama and his fellow Democrats in next week's elections.

Gross domestic product contracted at a 0.3 percent annual pace, less than forecast, a Commerce Department report showed today in Washington. The last major economic data before the election also showed that a record two-decade consumer spending boom ended last quarter as the credit crunch deepened.

``The crisis really kicked up in late September,'' Ethan Harris, co-head of U.S. economic research at Barclays Capital Inc. in New York, said in a Bloomberg Television interview. ``We're going to be looking at a very unfriendly GDP number in the fourth quarter, with a drop of 2 to 4 percent.''

...

The 6.4 percent rate of decline in spending on non-durable goods, like clothing and food, was the biggest since 1950.

Cutbacks in investments in business equipment and less spending on residential construction projects also contributed to last quarter's contraction.

A narrower trade deficit and a smaller decline in inventories prevented a deeper contraction. Excluding those two categories, the economy would have contracted at a 1.8 percent pace, the most since 1991.

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Update 1244GMT/ 0844EDT
And the magic number is:

-0.3%

• Q2 unchanged at +2.8%
• -14.1% change in durable goods
• Exports down. Q2 driven exports were only temporary.
• Big increase in government spending.
  
• Federal Spending increased 3.9% in Q2, 5.8% in Q4. 
• Defense Spending increased 6.6% in Q2, 18.1% in Q3. I guess someone decided to spend lots of defense dollars to stimulate the economy.
• State and Local government spending increased 2.5% in Q2, but only 1.4% in Q3.
• Disposable personal income increased 11.9% in Q2 but  -8.7% in Q3. Looks like the stimulus checks were spent pretty much straight away.
• Actual figure for GDP is $14.4292 trillion.
• Implicit price deflator is 4.1.
  

DOWNLOAD OFFICIAL RELEASE HERE. (pdf, 149.4kb)

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As Doc Neeson said, "This is it folks, over the top!"

For all lovers of doom and destruction, today's economic release is of major, major, historical importance - the all important 2008 Quarter 3 GDP figures.

As my little poll has shown, most readers like turtles, but some of you are convinced that today's figures will bring a little bit more doom and gloom into our lives, giving us that wonderful feeling of "Oh no, not ANOTHER day" when we wake up.

At 12.30GMT/0830EDT today, the BEA will release GDP figures for the quarter in question. You can wait on the page here. A link to the actual pdf download will follow as soon as I can manage it.

Bloomberg's poll of entrail readers has a median of a -0.5% contraction and an average of -0.6% contraction. What is interesting is that the highest forecast is +1.2% (RBS Greenwich Capital) while the lowest is -1.9% (ClearView Economics). Not being terribly experienced in the hagiography of studying how economic forecasters forecast, I would hazard a guess and say that the chances of an accurate forecast have somewhat diminished, given the wide spread of results.

Being the doomer I am, I would expect a 75% chance of between -0.5% and -1.0%. A 12.4% chance of between zero and -0.5%. A 12.4% chance of between -1.0% and -1.5%. And a 0.2% chance of anything else.

Did any of that make sense? I'm writing so many percentages that your browser might interpret them as commas.

Anyway, I'll be live blogging the GDP release because it's so darn exciting. I'll be also linking to Bloomberg and news reports as they arrive through the series of tubes that is the internet.

Please join me here in 50 minutes (it is 11.40GMT/07.40EDT) and we can chat in the comments about what is going on.