A Different View on U.S. GDP

Bring on the sugar rush: The economy grew at a 3.6% annual pace in the third quarter — much stronger than expected, according to a government report released Thursday.  But here’s the buzz kill: That number is not nearly as good as it looks.

The main reason that growth in the nation’s gross domestic product was so strong was because businesses are stockpiling larger inventories. Once you factor out the impact from the inventory boost, GDP growth would have been just 1.9%.

“Overall, the report still paints a picture of subdued underlying growth,” said Yelena Shulyatyeva, U.S. economist with BNP Paribas.

CNN

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