There are a number of reasons why Q3 GDP came in at its highest level for some time. One of them is a fairly large increase in inventories:
If we exclude inventories the trend in GDP growth is one of lower highs and higher lows – in other words boundaries of growth are narrowing, which is interesting when you assess the historical boundaries:
Odd is it not? The pattern of the last 4 years is unlike any seen over recent history!
But then again just look at the contribution of residential construction to real GDP (note the real growth component strips out price increases, so the full impact of the residential construction boom is hidden).
But the underlying trade data remains weak: real exports values are barely above levels reached in 2000:
Household final consumption expenditure remains supportive, but for how long given record high consumer debt?
But growth in consumption expenditure has largely exceeded average hourly wage increases over the year.