Impressive?

You'd think so. AP (10.31.07):

"The economy picked up speed in the summer, growing at a brisk 3.9 percent pace, the fastest in 1 1/2 years and an impressive performance even as a credit crunch plunged the housing market deeper into turmoil."

Economy Logs Brisk 3.9 Percent Growth

On the other hand. MarketWatch (10.31.07), via The Big Picture:

"Because of the way the government counts and reports the numbers, real-life inflation was understated and growth was overstated. The economy didn't really grow 3.9%, and inflation really wasn't 0.8%. The numbers aren't as good as they look."

Inflation was low because oil prices surged

"(A)ll this counting is done in current dollars, the kind you and I have in our pockets, the kind that lose value every day to inflation. In order to gauge how much of the increase in spending and investment during a quarter was due to real growth and how much to inflation, the government deflates the total number of dollars by its estimate for how much prices rose."

"In the third quarter, the government estimated that current dollar spending and investment increased at a 4.7% annual rate. After subtracting 0.8% for inflation [ed. - aka the "Price Deflator"], the real growth rate was 3.9% in the third quarter.

Barry provides some context:

"To highlight the impact that this 0.8% [deflator] had on the reported REAL GDP: [it] matches a level last seen in 1998; prior to that, the previous deflator gain of .8% was in 1963.

Peter Boockvar of Miller Tabak observes that 'with the dramatic upturn in energy prices and other commodities, the decline in the Price Deflator is obviously unsustainable.'"

I Call "Shenanigans" on GDP!

"'The consensus today for Nominal GDP was 5.1% and came in today at 4.7%, thus weaker than expected. Q3 GDP was fine, but not as good as the headline report reads.'"

Ain't out of the woods yet folks. Not by a long shot.