Simply looking at the headlines, one might think that the reported 3rd quarter GDP growth of 2.7% means that the economy is growing again after having languished at 1.7% last year. But, if you look at the truly "key" numbers that underlie that report, there's some very worrisome facts.
First, there's two consumption numbers that are extremely weak: (1) Consumer Spending and (2) Business Investment and Spending. Consumer spending, which typically drives 70% off our economy, was adjusted downwards from a previously reported 2% to only 1.4%. Business investment, which generally helps drive the non-consumer portion of the economy, went from a previously reported drop of 1.3% to a newly reported decline of 2.2%. On top of that, businesses spent 2.7% less on equipment and software than they did in the previous quarter. Put these numbers all together and it paints a clear story that people and businesses are not buying the things that would normally drive the economy. If this continues, we are definitely headed for a recession.
The only reasons that the report was as rosy as it was reported is because business inventories grew (without having any buyers); exports increased (because the dollar continues to be weak); and government spending jumped a whopping 9% from the previous quarter. None of those things are either good for economic growth or would signal any sustainable growth in GDP going forward. The bottom line is this GDP report was actually a bad report and the fact that the stock market isn't going bonkers over it just proves that.
--- MarketWatch: Third-quarter growth revised up to 2.7%: Inventories, exports boost growth, but consumer spending softer: http://www.marketwatch.com/story/third-quarter-growth-revised-up-to-27-2012-11-29