The U.S. Bureau of Economic Analysis today reported 2.8 percent annualized growth in real gross domestic product for the third quarter of 2013.

Economic growth in the third quarter was disappointing. To be sure, 2.8 percent growth looks strong. But the more fundamental and longer-term issue is consumers are still unable to release their pent-up demand since income gains remain so paltry. In fact, even with very weak industrial activity, there was a very large and unintended inventory build. The large stockpile built up in Q3, along with the government shutdown, will weigh down Q4 GDP growth. Moreover, uncertainty about near-term economic and job prospects (aggravated by the government shutdown), as confirmed by The Conference Board's latest consumer confidence estimates, prevents consumers from replacing worn-out furniture and appliances. Meanwhile, business sits on new investment projects, unwilling to give them a green light unless final demand picks up. Finally, a relatively tepid global economy is limiting export opportunities.