Q3 GDP came in higher than expected at a 4.3% annualized pace, which simply extrapolates one quarter’s growth into a full-year number.

The challenge is that the normal sequence of Advanced, Second (Revised), and Final readings was skipped, leaving us with only a preliminary snapshot, not a fully vetted data set.

Digging deeper into the details:

• Consumer spending, the largest component of GDP, was boosted by a rush to purchase electric vehicles ahead of the EV tax credit expiration.
• Government spending, particularly defense, also saw a meaningful increase.

This matters because what we need and what markets need is clean, durable data, not numbers distorted by one-time events or shaped to fit a narrative or agenda.

The takeaway: headlines don’t tell the full story. We all need to challenge ourselves to look under the hood, understand the drivers, and separate sustainable growth from temporary distortions.

I’ve said this many times: don’t watch the tail, watch the dog to find out the direction.
Headlines are the tail. The underlying drivers, the quality, source, and sustainability of the data are the dog.