That "5% GDP Growth" number is misleading.

The MSM are gleefully reporting that the economy grew by 5% in the third quarter.  This must be the economic boom that Obama has been promising since 2008?

Well, no.

It appears that most of the 5% growth last quarter was achieved by an increase in consumer spending on higher health insurance premiums. In other words, spending more on insurance premiums for ObamaCare is supposed to be good for the economy.

Does that make you feel richer already? No?

Well take a look at how Team Obama managed to create that 5% figure.

It seems that they "revised" (i.e.cooked the books) spending on health care services by taking it out of the 1st quarter and putting it back in later, in this case, the 3rd quarter.

Here's how they took it out:

Here's where they put it back in:




Here's a little secret: the government gets to revise the numbers for months and quarters in the past under the assumption that given more time they get more and better data. I found this out years ago when I hears a talk by a very smart - and witty - Wall Street analyst who made great fun of government economic statistics by quoting numerous revisions for GDP numbers for the same period.  It was eye-opening, and I have never viewed government statistics in quite the same way.

Revising economic data as better information is gathered sounds plausible, but it also gives the government the opportunity for political mischief.   Thanks to the "polar vortex" of early 2014 that slowed the economy, the government statisticians figured that the 1st quarter was so bad that they may as well use it as a "kitchen sink" quarter. Via Zero Hedge:

Back in June, when we were looking at the final Q1 GDP print, we discovered something very surprising: after the BEA had first reported that absent for Obamacare, Q1 GDP would have been negative in its first Q1 GDP report, subsequent GDP prints imploded as a result of what is now believed to be the polar vortex. But the real surprise was that the Obamacare boost was, in the final print, revised massively lower to actually reduce GDP! ... Because the brilliant propaganda minds at the Dept of Commerce figured out something banks also realized with the stub "kitchen sink" quarter in November 2008. Namely, since Q1 is a total loss in GDP terms, let's just remove Obamacare spending as a contributor to Q1 GDP and just shove it in [a later quarter].

.....

In short, two-thirds of the "boost" to final Q3 personal consumption came from, ... the same Obamacare which initially was supposed to boost Q1 GDP until the "polar vortex" crashed the number so badly, the BEA decided to pull it completely and leave this "growth dry powder" for another quarter. That quarter was Q3.

And that, my friends is how the MSM is now able to giddily report that the Obama economy is rolling in high gear.  

H/T Bud Norman at Central Standard Time