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Preliminary Third Quarter GDP Additions (2.8%) Appear Encouraging

November 8th, 2013 | by Morris Beschloss | Comments

Due to the arcane nature of the quarter-annual updates of the ongoing changes, registered by the U.S. gross domestic product of goods and services, final results are usually not available until the final weeks of the succeeding three months. However, the third quarter advance figures registered this week were pushed back significantly due to the cutback in personnel among most of October, because of the partial government shutdown during that month.

The reason behind the normally belated results of the previous quarter relate to the many varied components that don’t approach finality until the succeeding quarter has nearly ended. However, as is traditionally indicated, the advance figures for the third quarter (July-Aug-Sept) normally represent a reasonable retrospective of the economic trends of what can be expected in finality about three months hence.

On that basis, America’s economic engine is past the sputtering stage and is starting to gain a little speed, if ever so slightly. Leading the recovery parade during the previous quarter are the obviously outsized contributions of energy development, exports, personal consumption upcreep, and slight additions in past inventory cutbacks. Also adding to these modest, but growing revenue generations are both residential and commercial construction, a substantial portion of which is generated by need for long-term leasing or monthly rental. A significant by-product of the U.S. economy’s slow, but steady improvement is in the decreasing import statistics, driven by a lesser need for imported crude oil. Conversely, increased crude oil derivatives, especially to Mexico, are adding to America’s export total.

With the total inflation number hanging in at less than 2% annualized, cost of goods and personal income tracked the overall disinflationary percentages of both imports and exports, as the worldwide surplus of labor, consumer and producer goods, and a generally global investment increase residual, were reflected in the monthly utilization of both large corporations and independent businesses.

Despite the slight 0.3% increase of the third quarter increase indicated over the second quarter, the major stumbling block of unemployment continues to hang like a dark cloud over America’s economy in general.

While the partial shutdown of government spending in October will likely skew the 2013 final quarter figures, the current “Obamacare fiasco” could indicate the beginnings of a new flurry of unemployment, as independent businesses shed full-time employees. This is partially due to accommodate the need of signing up for the muddled nature of “Affordable Care,” which, at this writing, seems to be getting more confusing and confrontational by legislators from both sides of the House and Senate aisles.

The major good news encompassing the U.S. economy at large is the vast potential in natural resources and entrepreneurial wealth that is far superior to those exhibited by most of the rest of the world.
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