THE BASIS POINT

3Q GDP Cut 2.5% to 2%: CHART 2001-2011

Second look at 3Q2011 GDP was revised downward from +2.5% to +2.0%. GDP = C(onsumer Spending) + I(nvestments) + G(overnment Spending)+ (eXports)-i(mports). The initial GDP estimate has only two months of I, X, and M. The 3rd month is guesstimated, much of the downward revision in today’s update is from decreased I. Lower investments are indicative of either 1) less confidence on the part of business regarding future Consumer Spending or 2) adjustments for having gotten to far ahead of the consumer if investments were too large in the prior quarter.
3rdQ2011 GDP

GDP Deflator
The GDP Deflator is a measure of inflation in which each component is weighted according to its percent of GDP. The GDP Deflator was +2.5% for 3rdQ2011. With interest rates slow and the economy just barely growing I find +2.5% inflation high.

Corporate Profits
Corporate Profits for 3rdQ2011 were $1.507 trillion annualized. High Unemployment and growing Corporate Profits are part of what OWS is about.

Retail Sales
-ICSC-Goldman Store Sales, Week/Week -0.9%
-ICSC-Goldman Store Sales, Year/Year 2.8 %
-Redbook Store Sales, Year/Year +3.7 %
-Holiday Retail data this year may be odd by comparison because of aggressive pre-Black Friday sales and the fact that Thanksgiving is relatively early this year.

Richmond Federal Reserve Manufacturing Index
For October this index was unchanged ending four months of contraction.