GDP rises 2.5 percent. Is that too bullish?

GDP report includes lofty estimates for residential fixed investment in the second quarter, which will probably be revised downward.

Tuesday's GDP report showed the economy growing 2.5 percent, but some figures will certainly be revised in future reports.

Today, the Bureau of Economic Analysis (BEA) released their second "estimate" of the Q3 2010 GDP report showing that the economy continued to weakly expand with real GDP increasing at an annualized rate of just 2.5% from Q2 2010.

On a year-over-year basis real GDP increased 3.24% while the quarter-to-quarter non-annualized percent change was 0.63%.

The latest report reveals continued weakness in housing with residential fixed investment declining at a rate of 27.5% from the second quarter though additional revisions are needed to get something that resembles accuracy from this figure.

Note that the administration (and the BEA) have yet to take down their estimates for Q2 residential fixed investment with still sits at the lofty level of a supposed 25.7% quarter-to-quarter change... not likely.... look for that figure to be revised down in coming releases impacting the anemic "final" Q2 results.

Both imports and exports of goods and services slowed in the third quarter while investment in equipment and software was revised up to show a faster pace of growth at a notable pace of 16.8%.

In any event, these GDP report should be viewed with a high degree of skepticism.

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