In calculating third-quarter GDP, there was an increase of 9.6% in government spending and investments—in the previous quarter, there was a decrease of 0.2% in government spending and investments
Past News ReleasesRSS
Chicago, IL; Houston, TX; Los Angeles-Long Beach, CA; New York, NY; Washington, DC (PRWEB) November 12, 2012
In a recent Profit Confidential article, lead contributor and financial expert Michael Lombardi reports that data from the Bureau of Economic Analysis (BEA) reveal that the U.S. economy grew at an annualized rate of two percent in the third quarter, while gross domestic product (GDP) in the second quarter of 2012 was only 1.3%. He adds that the U.S. GDP in dollar value is on track to increase to $15.8 trillion this year. (Source: Bureau of Economic Analysis, October 26, 2012.) Lombardi notes that while the U.S. economic outlook in 2013 is for GDP in dollar value to increase, the overall outlook is still weak and a large part of the growth is due to government spending.
“In calculating third-quarter GDP, there was an increase of 9.6% in government spending and investments—in the previous quarter, there was a decrease of 0.2% in government spending and investments,” reports Lombardi. “National defense spending increased by 13.0% in the U.S. economy in the third quarter of 2012, compared to a 0.2% decrease in the second quarter.”
In the article “How Government Spending Really Fuelled Third-quarter U.S. GDP,” Lombardi points out that personal consumption in the U.S. economy increased in the third quarter by a mere two percent.
“Factories in the U.S. economy are still far from running at full speed,” says Lombardi. “In August, industrial production in the U.S. fell 1.4 % from a rise of 0.7% in July. In September, it increased only 0.4% from the decline in August.” (Source: Federal Reserve, October 16, 2012.)
Lombardi reasons that these data suggest that the increase in third-quarter GDP was stretched by government spending. The Profit Confidential expert claims that if we took the increase in government spending out, the GDP wouldn’t look as rosy as it does.
“The U.S. economy is weak; there have been no structural changes to the economy,” states Lombardi. “Since 2010, [U.S] GDP has seen growth of 10.6%—excellent growth, some would suggest. But national debt in the same period has grown more than 30.5%.” (Source: United States Department of the Treasury, October 26, 2012.)
Lombardi believes that the U.S. economic outlook in 2013 can’t be strong if growth is solely being fuelled by debt. He concludes that in the long run, raising GDP by increasing government spending is not sustainable.
Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $300 an ounce. In 2006, it “begged” its readers to get out of the housing market...before it plunged.
Profit Confidential was among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%.
To see the full article and to learn more about Profit Confidential, visit http://www.profitconfidential.com.
Profit Confidential is Lombardi Publishing Corporation’s free daily investment e-letter. Written by financial gurus with over 100 years of combined investing experience, Profit Confidential analyzes and comments on the actions of the stock market, precious metals, interest rates, real estate, and the economy. Lombardi Publishing Corporation, founded in 1986, now with over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more on Lombardi, and to get the popular Profit Confidential e-letter sent to you daily, visit http://www.profitconfidential.com.
Michael Lombardi, MBA, the lead Profit Confidential editorial contributor, has just released his most recent update of Critical Warning Number Six, a breakthrough video with Lombardi’s current predictions for the U.S. economy, stock market, U.S. dollar, euro, interest rates and inflation. To see the video, visit http://www.profitconfidential.com/critical-warning-number-six.