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For all the talk about Team Obama’s amazing campaign machine, it sure didn’t hurt that the economy turned in a pretty solid performance in the the third quarter.The Commerce Department has upwardly revised third-quarter real GDP to 3.1% from a previously reported 2.7%.
That makes the third quarter the strongest quarter of the year and the third strongest of the economic recovery that started in summer 2009. Indeed, on a nominal GDP basis, at 5.9% it was the strongest quarter of the recovery.
Also note that the unemployment rate fell sharply in the months leading up to the election, from 8.3% in July to 7.9% in October (which was reported just before Election Day.
The econ team at RDQ Economics thinks the strong report should cause the Fed to call off the dogs:
The average growth rate thus far this year, at 2.1%, is running ahead of the Fed’s most recent forecast of growth for 2012 (which was a central tendency of 1.7%-1.8%). Nominal GDP growth in the third quarter was 5.9% as GDP price inflation ran at 2.7%.
The Fed has no business continuing to ease if this is anywhere close to the true growth rate in nominal GDP (but again, the 4.3% growth rate over the last year is probably a better gauge of the trend).