Personal consumption added 2.21 points to today's revision of 3Q2014 GDP at 5.0% while government consumption added 0.80 points. TOGETHER they represent 60% of the total, which again gives the lie to the meme that 70% of the economy is still consumer spending.
Not any more. Frugality is still operative in this economy when only 44% of it is from the consumer side. Keep in mind that that's a one month IMPROVEMENT in the BEA's assessment of the contribution of personal consumption by 46%.
Hm. The difference a month can make.
In the second report a month ago personal consumption had added just 1.51 points, and government consumption 0.76. Personal consumption had been averaging just 1.48 points in contribution in 2011, 2012 and 2013. Government consumption had been averaging -0.45, actually adding a SUBTRACTION to GDP over the same period. The positive contribution from government spending now, however, is nearly 83% defense spending . . . the war on ISIS.
More war, more GDP.
Gross private domestic investment added 1.18 points in today's revision, but only 0.85 in the second. The three year average had been 0.94. The 39% improvement in the estimation for this category is a very healthy and welcome sign for the economy.
Net exports added 0.78 in today's report, unchanged from the second, but way up from the prior period average contribution of just 0.08 points.
Refined petroleum exports, up 3.7% on average in 2014 year to date over the 2013 average. It's a good thing.
