January 26, 2012

4th Quarter GDP Growth Could Be Lower Than 3rd Quarter

Bruce Yandle

Distinguished Adjunct Fellow

Mercatus Center economist Bruce Yandle looked at some of the important indicators ahead of tomorrow’s report on GDP growth. And he isn’t sure that the 4th quarter will show much improvement from the previous quarter.

“I hope that we will see stronger growth,” said Yandle. “But based on 4th quarter industrial production growth, as reported by the Federal Reserve Board, and weak monthly indicators through December, as reported by the Institute for Supply Management, I think 4th quarter GDP growth will come in at 1.5 percent to 2.0 percent, perhaps weaker than 3rd quarter GDP growth of 1.8 percent. 

“While December Christmas sales were strong, seasonal adjustment softens that effect. Many of the goods sold were actually produced awhile back, reducing the impact on growth," he said.