How we achieved 4.3%
For the first posting since the extended not-so-voluntary vacation, let me hit upon one of General Glut's favorite themes.
You all probably saw the big revision to 2005:III GDP: 4.3%. Maybe you didn't see the whole story, however.
First, consumer spending as a % of GDP rose to 70.2%. After beginning to descend from the heights of early 2003 (peaking at 70.5% in 2003:I) and falling all the way to 69.8% in 2004:II (irony meter reading: HIGH), the dependence of the US economy on the consumer is definitively rising again.
Second, the personal savings rate in 2005:III hit -1.5%, the lowest quarterly figure on record (quarterly figures begin in 1947). Over the first nine months of this year the personal savings rate is -0.4% and the US is set to rack up the first annual negative personal savings rate since 1934.
A foolish man built his house on the sand. And the rain fell, and the floods came, and the winds blew and beat against that house, and it fell, and great was the fall of it.