GDP 'Nowhere Near' 4.3%: Rosenberg Dismisses Q3 Report As 'Fugazi,' Pegs Real Growth At 0.8% - SPDR S&P 500 (ARCA:SPY)

Core Viewpoint - The U.S. GDP growth of 4.3% in Q3 is being challenged by economist David Rosenberg, who claims the real growth is only 0.8% due to underlying economic weaknesses masked by government spending and depleted savings [1][2][3]. Economic Analysis - The BEA reported a rise in real GDP from 3.8% in Q2 to 4.3% in Q3, primarily driven by consumer spending, exports, and government spending [2]. - Rosenberg argues that the GDP figures are misleading, suggesting manipulation similar to CPI data, and emphasizes that true economic growth is minimal when accounting for government spending and a significant drop in personal savings [2][3]. - The personal disposable income growth has remained flat, which Rosenberg identifies as a critical indicator contradicting the apparent consumption boom [3]. Diverging Perspectives - The report has ignited a debate among analysts, with Rosenberg viewing the economy as hollow and dependent on unsustainable spending, while Gordon Johnson from GLJ Research perceives a concerning nominal boom [4]. - Johnson points out that nominal GDP growth surged by 8.2%, with a GDP price index of 3.8%, indicating inflationary pressures that the Federal Reserve's easing cycle may exacerbate [5]. GDP Components - The BEA confirmed that a decrease in imports, which negatively impacts GDP, artificially inflated the headline growth figure [6]. - The price index for gross domestic purchases increased to 3.4% from 2.0% in the previous quarter, supporting Johnson's concerns about inflation [6]. Market Reactions - Investors face a dilemma in interpreting the GDP report, choosing between the headline strength, Rosenberg's "fugazi" weakness, or Johnson's inflationary concerns [7].