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By New_Deal_democrat November 25, 2014 1:46 pm
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Revised Q3 GDP: across the board good news

This morning the BEA released its revised estimate of Q3 GDP, including the alternate measure of Gross Domestic Income, and also corporate profits.  

This was the last of three reports that offer us a very good look into the strength of the US economy in 2015.  First came October housing permits,which gave us a new post-recession high -- the first such high in a year.  The second was real retail sales, which, on a per capita basis, missed setting a new high by less than 0.1%.

While GDP is generally a look in the rear view mirror, there are a few aspects that look a year into the future. These are real private residential investment (new housing, blue in the graph below) and corporate profits deflated by unit labor costs (one of Professor Geoffrey Moore's long leading indicators, red in the graph below):

More importantly, that housing permits and corporate profits have both made new highs, and real residential investment and real retail sales per capita within a hairsbreadth of new highs, solidifies my conviction that US economic growth is going to continue - and likely accelerate at least slightly - during 2015.

Another strong positive from this morning's report was the alternate measure of Gross Domestic Income.  It is generally thought that real GDI tends to lead real GDP.  It certainly did as to the 2008 recession.  Here they are for the last 10 years:

And here they are on a quarter over quarter basis:

The last two quarters of both real GDP and real GDP have been the strongest of any two quarter period since 2004.

The bottom line is that today's report is almost across the board good news.

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