The report showed that while private consumption ticked up a bit, government spending made a somewhat bigger contribution to the number. In other words, the American consumer spent a bit more of her income in Q3 on herself and her family, while politicians spent a bit more of her future income wherever they saw fit.
So what's the problem? GDP's up and the market likes it!
The problem, aside from the govt spending her future income part, is that the number merely sums the components — there's no accounting for the ultimate economic impact of say personal consumption (the consumer spending her own money on herself) vs government spending (the politician spending the consumer's income wherever he sees fit—where, alas, all too often—it's most politically expedient). Nor can it account for the impact of various categories within a component. For example; if personal spending on health care happens to spike, that would help the GDP number, but that's clearly not a way to grow the economy.
Bottom line; if government spending is to garner a larger share of GDP (as it did in Q3) going forward, we are in a world of hurt ($16 trillion in debt and counting—not including the tens of trillions in unfunded promises! Not to mention the long-term economic impact of government crowding out the private sector—as it controls an ever-greater portion of yours and my income while inspiring producers to allocate more of their resources to lobbying*, as opposed to production).
*Read Mamas Don't Let Your Babies Grow Up to be Lobbyists...