3Q GDP +3.5%
A better than expected GDP report is spurring markets higher this morning (3Q GDP Report – from the Bureau of Economic Analysis).
Two thirds of the growth was driven by “Motor Vehicles & Parts”, “Residential Fixed Investment” and “Federal Government” – that is the sale of autos and homes spurred by Cash For Clunkers, The 1st Time Home Buyer Tax Credit and low mortgage rates, and increased government spending.
Wells Fargo’s Chief Economist John Silva had this to say: “Big contributors were consumer spending on autos – cash for clunkers – federal government, inventories and housing – tax credit….. Core issue: how much of this is sustainable without Fed programs?“