Always remember to read the fine print, especially when it comes to government statistics.
Though the Commerce Department announced Thursday that estimates for third-quarter GDP growth had been revised up to an eye-popping 3.6% annual rate, the data looks a lot less bullish upon closer look. It turns out that much of that growth has to do with businesses increasing their inventories. In a fit of overconfidence, in other words, businesses bought more goods than there was demand for. Here’s Dan Alpert, a managing partner with the investment bank Westwood Capital, on Twitter this morning:
In another piece of seemingly bullish data, the Labor Department announced that initial jobless claims — which tracks how many people had filed for jobless benefits in the past week — fell to a three-month low of 298,000. But market watchers fear that the numbers are merely due to a ramp up of seasonal hiring for the upcoming holidays.
Investors hope for a clearer picture of the state of the job market tomorrow, when the Labor Department will release it’s estimate of job growth for the month of November.