As previously reported, nominal GDP in the U.S. increased by 4.0%, or USD 612.50 billion, in Q3 2012 compared to Q3 2011. A closer look at this USD 612.50 billion YoY growth reveals it was generated as follows:
In summary, the Q3 2012 GDP figures demonstrate that the U.S. remains a consumer spending nation supplied by imports. As long as this remains the case there can be no real improvement in the U.S. economy and in unemployment rates. What the U.S. economy needs is more Gross Private Domestic Investment, more production (see here and here), a substantial improvement in net exports and more savings (see here). And of course, less government spending. Finally, remember that GDP by itself is not a good measure of how an economy is performing as a government can simply increase government spending to improve it (here's an example). There is a reason why businesses measure performance in profits and returns and not in sales + expenses.
- Personal Consumption Expenditure: USD 380.70 billion / 62.2% of YoY GDP growth
- Gross Private Domestic Investment: USD 194.80 billion / 31.8% of YoY GDP growth
- Government Consumption Expenditure & Gross Investment: USD 24.00 billion / 3.9% of YoY GDP growth
- Net Exports: USD 13.00 billion / 2.1% of YoY GDP growth
In summary, the Q3 2012 GDP figures demonstrate that the U.S. remains a consumer spending nation supplied by imports. As long as this remains the case there can be no real improvement in the U.S. economy and in unemployment rates. What the U.S. economy needs is more Gross Private Domestic Investment, more production (see here and here), a substantial improvement in net exports and more savings (see here). And of course, less government spending. Finally, remember that GDP by itself is not a good measure of how an economy is performing as a government can simply increase government spending to improve it (here's an example). There is a reason why businesses measure performance in profits and returns and not in sales + expenses.
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