What’s Really Behind the GDP Numbers?

This is sure to brighten your Thursday evening: according to the Bureau of Economic Analysis (BEA) numbers, motor vehicle output accounted for 47.78% of GDP growth in the third quarter. The Cash for Clunkers program had a huge impact on sales in the third quarter, leading to a huge spike in sales, but one that was not sustained after the end of the program. The BEA numbers mean that the real GDP growth rate from last quarter would likely have only been around 1.7% instead of the 3.5% including the government intervention. (It’s difficult to know exactly what motor vehicle output would have been without the Cash for Clunkers program.)