Friday, October 30, 2009

Third Quarter GDP = 3.5% ?

Yesterday's headline news:"Real gross domestic product increased at an annual rate of 3.5% in the third quarter of 2009"

Wow, not bad. Hold on, wait a second ......

"Motor vehicle output added 1.66 percentage points"

That is "cash for clunkers", isn't it?


"Real federal government consumption expenditures and gross investment increased 7.9%"


OK, here comes the simple math:
3.5% - 1.66% - (7.9% * 30%) = -0.53%

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