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October 2014
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November 2014

GDP Growth Estimate Increases

With today's GDP data release, the BEA increased their estimate of real GDP growth in the third quarter today to 3.9 percent (up from th earlier estimate of 3.5%). This, combined with the 4.6% growth from the second quarter, means the U.S. economy experienced solid and above normal growth through the middle of 2014. 

GPD2014.IIIB

The revisions in the new release, based on more complete data, include upward revisions in both consumption and investment.  The contributions to overall growth from each of the four major components of GDP are presented in the table below:

GDPTable2014.IIIb
 

You can download the data here.


Inflation Stays Flat in October

Inflation seems to be firmly in check, according to the October CPI News Release from the Bureau of Labor Statistics.  Overall, the CPI was flat in October and up just 1.7% in the past year. 

Screen Shot 2014-11-20 at 8.44.45 AM

Even though the overall price level has been relatively stable over the past year, there have been several wild swings in individual prices - some positive and some negative.  For example:

  • Even though gas prices are declining, that doesn’t mean that electricity bills are too. Electricity prices climbed 3.1% in the past year while gas prices fell 5% over the same period.
  • Not all protein is the same: The price for chicken remained constant within the past twelve month, while egg increased by 6.7%, and ground beef by 18.6%.
  • Comparing prices of apples and oranges? It’s possible but it shows they are different. Apple prices decreased by 0.5% while orange prices increased by 9.6%.
  • Booking airline tickets in advance doesn’t always have to be cheaper. The price index for airline fares declined by 2.08% within the past year.
  • The omnipresence of streaming services like Netflix might explain why the price for DVDs decreased by 8.5% in the past year. Interestingly though their price increased by 2% in the past month.

The table below offers examples of price changes over the past year from big price drops to big price rises.

 CPI Table 1014

Another Good Jobs Report

This morning, the BLS released the Employment Situation report for October and the news is very good.  The unemployment rate is now back to 5.8% for the first time since July 2008. 

Unemp1014

In addition, there were 214,000 new jobs added in October.  The economy has added more thatn 200,000 jobs per month for nine straight months now.  In 2014, we are averaging 229,000 new jobs per month.  That is real recovery.

Employ1014