GDP grew at a 2.8% annual rate this quarter, although it is up a lesser 1.65% Q3 2013/Q3 2012. In the quarter growth was aided by inventories and residential structures – excluding these two components growth had risen by 1.63% on an annualised basis. If QE is impacting the demand for residential property, then we cannot rely on headline growth to find out the underlying strength of the economy.
Recent new order data shows growing weakness if we adjust for producer price inflation:
Retail sales are also more less showing slowing moribund growth: the annual blip up in mid 2013 was due to weakness in the previous summer.
And of course, no charts needed to confirm the weakness in employment data in the last 3 months.
Slow growth in Europe and still a number of concerns over China will continue to cast a shadow over US growth. All I see from current data is risk and a confirmation that QE may be impacting the supply of housing assets. All else still remains very much “Western Frontish”.