It's only the third time in the past twenty quarters that GDP has come in above 3%. You'd think the "hallelujahs" would be heard far and wide on hopes that maybe we're finally turning the corner on a half-decade that's been plagued by sub-par growth and recession.
Unfortunately, that's not the case though, as markets and economists alike knew immediately that there was more to the story than a positive 3.1% headline number suggests.
"It's an encouraging sign, but I wouldn't get too excited about it," says Kevins Cummins, senior U.S. economist at UBS, in the attached video. "It is a bit backward looking and a bit dated," he says of the report on growth from July, August and September.
Officially, the third and final report on Q3 GDP from the Commerce Department shows that 0.7% of the gain came from inventories, and that without it "real final sales of domestic product -- GDP less change in private inventories -- increased 2.4%," as the press release from the Bureau of Economic Analysis states. Add in a 9.5% increase in federal government expenditures, and you hit your headline number.Read More »from Federal Spending, Rising Inventories Mask Much Weaker Economy