GDP Rose by 4.9% Amidst a 1.0% Drop in Real Disposable Income

In 2023 Q3, real GDP grew by 4.9%. However, when breaking it down, real final sales accounted for a 3.5% rise, with the remainder being inventory adjustments, which balance out over time. The growth from private domestic sales was even more modest at 3.3%. GDI paints a grim picture with real disposable personal income dropping by 1.0%, reversing a 3.5% gain from the last quarter. The gap between GDP and GDI seems to be widening. The Fed faces significant challenges, largely due to its own actions, with seemingly no solutions in sight.