Droopy Data

Despite last week’s array of disappointing data, including quarterly GDP growth of 1.5%, weak housing and business fixed investment spending, weak consumer spending and wage and inflation data, the economy’s OK. Q3 GDP growth was temporarily depressed primarily due to earlier inventory overbuilding. Separately, real private sales to domestic purchasers (which excludes inventory changes, trade and government spending) grew a solid 3.2%. Thus, Q4 GDP growth should be about 2.5%.