The third-quarter GDP report came out this morning and it showed growth of 3.5%. That was higher than expectations of 3% so the stock market is looking better this morning. Here are some details on the GDP report:
Robust government spending, exports, consumer spending – buoyed by auto purchases Congress’s now-expired cash-for-clunkers program – and housing helped finally push the measure into positive territory. Spending on consumer durable goods like cars shot up an astounding 22.3 percent at an annual rate, compared to a decrease of 23.3 percent the previous quarter.
The economic growth came without a major surge in inflation. The price index for gross domestic purchases, which measures prices paid by United States consumers, increased 1.6 percent in the third quarter, compared with an increase of 0.5 percent in the second, the department said. Excluding food and energy prices, the inflation index rose 0.5 percent in the third quarter, compared with an increase of 0.8 percent in the second.
This is good news although we’ve yet to see a recovery in the jobs market. Earlier this week, I warned investors that the GDP report will get a lot of attention but it will exclude trade data from September so the 3.5% figure will be revised next month and again in the month after that. I suggested that SXC Health Solutions (SXCI) is a good stock to own no matter what the GDP report says.