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"Bringing the measurements of critical economic activities into the twenty-first century by
mining tracking data for an understanding of what American consumers were doing yesterday."


Daily Absolute Demand Index


 Daily Absolute Demand Index(1): 
 
Chart
(Click here for best resolution)
 
 Notes:
  (1) A projection of our basic year-over-year data into an aggregate absolute demand, reflecting the compounding impact of extended expansions or contractions. The daily data is normalized such that the year-long average for 2005 would be at 100 in the chart.


 





Monthly Absolute Demand Index


 Monthly Absolute Demand Index(3): 
 
Chart
(Click here for best resolution)
 
 Notes:
  (3) A projection of our basic year-over-year data into an aggregate absolute demand, reflecting the compounding impact of extended expansions or contractions. The data points represent month-long averages of the daily data, normalized so that the year-long average for 2005 would be at 100 in the chart.


 


Current Weighted Composite & Sector Index Values



Chart
(Click here for best resolution)


Last 10 Weighted Composite Index Values
Date:11/28/201911/29/201911/30/201912/01/201912/02/201912/03/201912/04/201912/05/201912/06/201912/07/2019
Value:98.2798.0097.0797.5898.2298.7198.9699.3399.94100.70


Current Values for Each of the Sector Indexes
Sector:AutomotiveEntertainmentFinancialHealthHouseholdHousingRecreationRetailTechnologyTravel
Value(3):97.4397.1989.3294.35106.12106.71105.8193.16100.08115.36

 Notes:
  (3) The 10 sectors contribute to our Weighted Composite Index according to weightings provided for their various sub-components by the United States Department of Commerce's National Income and Product Accounts ('NIPA') Tables (see our FAQs page for further explanations). In general, components in our Housing Sector have the highest weightings for durable goods in the NIPA matrix, while components in our Retail Sector contribute dynamically to many different line items in the weighting matrix, depending on specific goods involved.


 




Current Growth Index Values & Percentiles


Trailing 91, 183 and 365 Day Data
Trailing Days:91-Day183-Day365-Day
% Growth(4):0.58%0.37%-0.58%
Percentiles(5):25.28%19.21%7.43%

 Notes:
  (4) The average net year-over-year growth percentage of the Weighted Composite Index over the past 91, 183 and 365 Days (the daily value for the equivalent of a real-time Consumer 'GDP' for the trailing moving 'quarter', 'six months' and 'year').
  (5) The percentile of the above among all GDP quarters, six months and years since the spring of 1947 in the BEA's GDP growth tables (i.e., the percentage of all comparable time spans in the BEA's data below the values in the '% Growth' line above).


 

Commentary


     
  November 27, 2019 - BEA Revises Third Quarter 2019 GDP Growth Upward to 2.13%:

In their second estimate of the US GDP for the third quarter of 2019, the Bureau of Economic Analysis (BEA) reported that the US economy was growing at a +2.13% annual rate, up 0.20 percentage points (pp) from their previous estimate and up 0.12pp from the prior quarter.

This report contained no material new information about the economy. All of the increased headline growth came from a revision to the previously reported inventory number, which was revised from a slight contraction (-0.05% growth rate) to mild growth (+0.17% growth rate), adding 0.22pp to the headline. None of the other line items impacted the headline number by more than 0.07pp.

Annualized household disposable income was revised $-102 lower than in the previous report, and the household savings rate was reported to be 7.9%, down -0.2pp from the previous report.

For this estimate the BEA assumed an effective annualized deflator of 1.67%. During the same quarter the inflation recorded by the Bureau of Labor Statistics (BLS) in their CPI-U index was effectively the same at 1.66%. Slightly over estimating inflation results in slightly pessimistic growth rates, and if the BEA's nominal data was deflated using CPI-U inflation information the headline growth number would have been marginally higher at 2.18%.

Among the notable items in the report :

-- Consumer spending for goods was reported to be growing at a 1.17% rate, up 0.03pp from the previous estimate and but still down -0.57pp from the prior quarter.

-- The contribution to the headline from consumer spending on services was reported to be 0.80%, up 0.01pp from the previous report and down -0.49pp from the prior quarter. The combined consumer contribution to the headline number was 1.97%, up 0.04pp from the previous report but still down a material -1.06pp from the prior quarter.

-- The headline contribution for commercial/private fixed investments was revised to -0.18%, up 0.04pp from the previous report and up 0.07pp from the prior quarter.

-- Inventories added 0.17% to the headline number, up 0.22pp from the previous report and, more importantly, up 1.08pp from the prior quarter. It is important to remember that the BEA's inventory numbers are exceptionally noisy (and susceptible to significant distortions/anomalies caused by commodity pricing or currency swings) while ultimately representing a zero reverting (and long term essentially zero sum) series.

-- The contribution to the headline from governmental spending was revised to 0.28%, down -0.07pp from the previous report and down -0.54pp from the prior quarter.

-- The contribution from exports was revised to 0.11%, up 0.02pp from the previous report and up 0.80pp from the prior quarter.

-- Imports subtracted -0.22% annualized 'growth' from the headline number, down -0.05pp from the previous report and down -0.23pp from the prior quarter. Foreign trade contributed a net -0.11pp to the headline number.

-- The annualized growth in the 'real final sales of domestic product' was revised to 1.96%, down -0.02pp from the previous report and down -0.96pp from the prior quarter. This is the BEA's 'bottom line' measurement of the economy (and it excludes the inventory data).

-- As mentioned above, real per-capita annualized disposable income was revised $-102 lower than in the previous estimate. The annualized household savings rate was 7.9% (down -0.2pp from the previous report). In the 45 quarters since 2Q-2008 the cumulative annualized growth rate for real per-capita disposable income has been 1.48%.




The Numbers, As Revised

As a quick reminder, the classic definition of the GDP can be summarized with the following equation :

GDP = private consumption + gross private investment + government spending + (exports - imports)


or, as it is commonly expressed in algebraic shorthand :

GDP = C + I + G + (X-M)


In the new report the values for that equation (total dollars, percentage of the total GDP, and contribution to the final percentage growth number) are as follows :

GDP Components Table

Total GDP = C + I + G + (X-M)
Annual $ (trillions) $21.5 = $14.7 + $3.8 + $3.8 + $-.7
% of GDP 100.00% = 68.10% + 17.42% + 17.51% + -3.03%
Contribution to GDP Growth % 2.13% = 1.97% + -0.01% + 0.28% + -0.11%


The quarter-to-quarter changes in the contributions that various components make to the overall GDP can be best understood from the table below, which breaks out the component contributions in more detail and over time. In the table below we have split the "C" component into goods and services, split the "I" component into fixed investment and inventories, separated exports from imports, added a line for the BEA's "Real Final Sales of Domestic Product" and listed the quarters in columns with the most current to the left :

Quarterly Changes in % Contributions to GDP

Q3-2019 Q2-2019 Q1-2019 Q4-2018 Q3-2018 Q2-2018 Q1-2018 Q4-2017 Q3-2017 Q2-2017 Q1-2017 Q4-2016
Total GDP Growth 2.13% 2.01% 3.09% 1.09% 2.92% 3.50% 2.55% 3.55% 3.20% 2.15% 2.30% 2.04%
Consumer Goods 1.17% 1.74% 0.32% 0.33% 0.75% 1.13% 0.27% 1.55% 0.85% 1.14% 0.68% 0.41%
Consumer Services 0.80% 1.29% 0.46% 0.65% 1.59% 1.57% 0.88% 1.57% 0.76% 0.49% 0.95% 1.29%
Fixed Investment -0.18% -0.25% 0.56% 0.46% 0.13% 0.89% 0.94% 1.45% 0.25% 0.48% 1.27% 0.33%
Inventories 0.17% -0.91% 0.53% 0.07% 2.14% -1.20% 0.13% -0.64% 1.00% 0.11% -0.70% 1.18%
Government 0.28% 0.82% 0.50% -0.07% 0.36% 0.44% 0.33% 0.42% -0.02% 0.24% -0.04% 0.19%
Exports 0.11% -0.69% 0.49% 0.18% -0.78% 0.71% 0.10% 1.19% 0.54% 0.20% 0.72% -0.30%
Imports -0.22% 0.01% 0.23% -0.53% -1.27% -0.04% -0.10% -1.99% -0.18% -0.51% -0.58% -1.06%
Real Final Sales 1.96% 2.92% 2.56% 1.02% 0.78% 4.70% 2.42% 4.19% 2.20% 2.04% 3.00% 0.86%





Summary and Commentary

Except for the inventory number, most of this report's changes can be characterized as statistical noise. The take-aways from the report can be summarized as follows:

-- The improved headline growth came from growing inventories. That is not a good economic signal in and of itself, and it does not reflect improved domestic consumption.

-- The material drop from the prior quarter's greater than +3% growth in consumer spending for goods and services was confirmed.

Last month we mentioned that "Fear, Uncertainty and Doubt" ("FUD") can be as much of a factor in consumer spending rates as horrendous weather. Let's hope that consumer holiday spending largely ignores the ongoing political storms in Washington.
 
     
   
 Note: A more complete list of historical commentary can be found on our History Page ...
 
   


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