Third quarter gross domestic product was revised down Tuesday from 2.5% to 2.0%. That's a sizable adjustment, but when you consider GDP growth from the previous quarters this year, a .5% revision downward is hardly that bad. (See: As Gloom Rises, U.S. Economic Data Flow Strengthens)
In Q1, the U.S. economy grew a minuscule .4%. In Q2, that number rose to 1.3%. So 2.0% growth in the third quarter at a time when there were "terrible headwinds" such as the debt ceiling debate and a market drop of 8%-9% is not horrible and actually shows some resilience in the consumer, which makes up 70% of the GDP figures, says Yahoo! Breakout's Jeff Macke.
"Consumer spending was revised slightly down to a 2.3% growth pace from 2.4% because of adjustments to motor vehicle fuels and lubricants," reports Reuters. "It was still the quickest pace since the fourth quarter of 2010." This is right in line with previous reports of retail sales and earnings on The Daily Ticker.
What does this all mean for next year as we head into 2012? In a word, Macke says, the outlook is "grim."
But he acknowledges the fact that no one has a clue what next year will bring. There are just too many unknown variables plaguing the global economy, the biggest of which Macke says is the European debt crisis.
In a sea of uncertainty, one thing is clear, says Macke: The future of the U.S. economy rests upon what happens in Europe. If Europe "seizes economically," it is going to have a huge impact on the U.S. in terms of both jobs and the ability of U.S. companies to do business there.
For more, see: Europe in Crisis: U.S. to the Rescue?