U.S. Domestic Income Grows Strongly In Q4 2011, Outpaces GDP Growth

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Reuters reports Economy grew faster than expected in fourth quarter Gross domestic product expanded at a 3 percent annual rate, the quickest pace since the second quarter of 2010, the Commerce Department said on Wednesday in its second estimate.

The BEA reported today that the overall economy (real GDP) grew by 2.2% at an annual

By Mark J. Perry: The BEA reported today that the overall economy (real GDP) grew by 2.2% at an annual rate in the first quarter of 2012. However, the private components of GDP (personal consumption expenditures, gross private domestic investment, and net exports) grew by 3.4% from January-March, following a 4.6% increase in Q4 2011 (see chart above).

GC Mays submits: The Bureau of Economic Analysis released it's "Advance" estimate of Real GDP and reported that GDP increased 2.0% in the third quarter after increasing 1.7% in the second quarter. The small acceleration in GDP primarily reflected a smaller decrease in net exports due to reduced imports, an increase of 2.6% in personal consumption which is due to a pick up in spending for services, compared to a 2.2% increase in the second quarter.

The 3.5% growth rate was, in my view, in large part attributable to direct measures to stimulate the economy, including direct spending on goods and services by the government (Federal, state and local), as well as tax measures. First, let's take a look at how each category of final demand accounted for total growth, in the context of a mechanical decomposition, in Figure 1.

As we went over yesterday, the theory of the excise tax is that employers will buy less costly health-care plans and put the money they save into wages. Most of you had one question in response to that, which was well expressed in the first comment to the post: "I'm confused," wrote Reader44.