Unexpectedly Intriguing!
November 1, 2011

On 3 October 2011, we offered the following forecast for where GDP in the third quarter of 2011 would be recorded:

Assuming that the deviation between our modified limo forecast value and actual GDP can be described by a normal distribution, we estimate a 68.2% probability of the BEA recording real GDP for 2011-Q3 somewhere between $13,160.1 billion and $13,439.5 billion, and a 95% probability of it falling between $13,020.4 billion and $13,579.2 billion. There is a 99.7% probability of 2011-Q3's GDP figure being recorded somewhere between $12,880.8 billion and $13,718.8 billion.

Although only the first advance estimate of GDP for 2011Q3 has been released so far, here's the tale of the tape:

GDP Forecast: Real GDP vs Climbing Limo vs Modified Limo, 2011Q3-Advance Estimate

Real GDP in 2011-Q3 was well within our forecast range, as the advance estimate for U.S. GDP in the quarter is $13,352.8 billion (in terms of constant 2005 U.S. dollars). Compared to the midpoint of our forecast range, $13,299.8 billion, the advance estimate for 2011-Q3 real GDP was just 0.4% higher.

Using the advance GDP estimate for the third quarter of 2011, which will be revised at least twice more before being "finalized" (pending later revisions), we can reasonably project that the inflation-adjusted value of U.S. GDP for the fourth quarter of 2011 to be between $13,275.3 and $13,556.7 billion (in terms of constant 2005 U.S. dollars). We estimate a near-70% probability of 2011-Q4 GDP falling between these values.

We project a 99.7% likelihood that 2011-Q4 GDP will be between $12,994.0 and $13,838.0.

On a technical note, we will revise our forecast when the third estimate of 2011-Q3 GDP is released in two months time.

Overall, the U.S. economy is continuing to perform as expected. We anticipate that growth will continue at a similar pace to 2011-Q3 through the end of the year, however we expect that the U.S. economy will begin to slow significantly in the second quarter of 2012, based upon dividend futures data for the S&P 500.

Labels: ,

About Political Calculations

Welcome to the blogosphere's toolchest! Here, unlike other blogs dedicated to analyzing current events, we create easy-to-use, simple tools to do the math related to them so you can get in on the action too! If you would like to learn more about these tools, or if you would like to contribute ideas to develop for this blog, please e-mail us at:

ironman at politicalcalculations.com

Thanks in advance!

Recent Posts

Stock Charts and News

Most Popular Posts
Quick Index

Site Data

This site is primarily powered by:

This page is powered by Blogger. Isn't yours?

CSS Validation

Valid CSS!

RSS Site Feed

AddThis Feed Button


The tools on this site are built using JavaScript. If you would like to learn more, one of the best free resources on the web is available at W3Schools.com.

Other Cool Resources

Blog Roll

Market Links

Useful Election Data
Charities We Support
Shopping Guides
Recommended Reading
Recently Shopped

Seeking Alpha Certified

Legal Disclaimer

Materials on this website are published by Political Calculations to provide visitors with free information and insights regarding the incentives created by the laws and policies described. However, this website is not designed for the purpose of providing legal, medical or financial advice to individuals. Visitors should not rely upon information on this website as a substitute for personal legal, medical or financial advice. While we make every effort to provide accurate website information, laws can change and inaccuracies happen despite our best efforts. If you have an individual problem, you should seek advice from a licensed professional in your state, i.e., by a competent authority with specialized knowledge who can apply it to the particular circumstances of your case.