The US economy grew exactly as analysts predicted in the third quarter. Though likely not as much as the Federal Reserve wanted.
GDP expanded 2 per cent on an annualised basis, according to flashes via Reuters:
RTRS-US ADVANCE Q3 GDP +2.0 PCT (CONSENSUS +2.0 PCT), Q2 +1.7 PCT; FINAL SALES +0.6 PCT (CONS +1.2 PCT), Q2 +0.9 PCT
RTRS-US ADVANCE Q3 GDP DEFLATOR +2.2 PCT (CONS +1.9 PCT), Q2 +2.0 PCT
RTRS-US Q3 PCE PRICE INDEX +1.0 PCT (CONS +1.2 PCT), Q2 0.0 PCT; CORE PCE +0.8 PCT (CONS +1.0 PCT), Q2 +1.0 PCT
RTRS-US Q3 CONSUMER SPENDING +2.6 PCT, LARGEST RISE SINCE Q4 2006, (Q2 +2.2 PCT); DURABLES +6.1 PCT (Q2 +6.8 PCT)
RTRS-US Q3 MARKET-BASED PCE PRICE INDEX +1.3 PCT (Q2 -0.2 PCT), CORE +1.1 PCT (Q2 +1.0 PCT)
RTRS-US Q3 BUSINESS INVESTMENT +9.7 PCT (Q2 +17.2 PCT), EQUIPMENT/SOFTWARE +12.0 PCT (Q2 +24.8 PCT)
RTRS-US Q3 HOME INVESTMENT -29.1 PCT (Q2 +25.7 PCT), BUS. INVESTMENT IN STRUCTURES +3.9 PCT (Q2 -0.5 PCT)
RTRS-US Q3 EXPORTS +5.0 PCT (Q2 +9.1 PCT), IMPORTS +17.4 PCT (Q2 +33.5 PCT)
RTRS-US Q3 GDP EX MOTOR VEHICLES +1.6 PCT (Q2 +1.8 PCT)
RTRS-US Q3 YEAR-ON-YEAR PCE PRICE INDEX +1.4 PCT (Q2 +1.9 PCT), CORE PCE +1.3 PCT (Q2 +1.5 PCT)
RTRS-US Q3 BUSINESS INVENTORY CHANGE +$115.5 BLN (Q2 +$68.8 BLN)
RTRS-US Q3 BUSINESS INVENTORY CHANGE ADDS 1.44 PERCENTAGE POINT TO GDP CHANGE
Update — Some context on the final sales numbers and that inventory contribution, via Monument Securities’ Stephen Lewis:
Final sales to domestic purchasers, a proxy for US domestic demand, did not weaken as sharply from the 2010Q2 rate as expected…
Inventories are estimated to have surged in Q3. Indeed, since 1995, there has been only one quarter (1998Q1), when inventories rose by more than indicated in this report. The chances are that either this figure will be revised down, and Q3 GDP growth with it, or there will be a substantial negative contribution to GDP from ‘the change in inventories’ in Q4.
And looking ahead to the GDP revisions:
…over the past six quarters, there has been an average revision to the GDP growth rate of 0.9 percentage points between the advance report and final data. In five cases out of the six, the revision was in the direction of zero.
Related link:
Prepare for the blockbuster mega week – FT Alphaville