US Q3 GDP re­vised higher than ex­pected

Financial Mirror (Cyprus) - - FRONT PAGE -

Tues­day brought the first re­vi­sion for third-quar­ter gross do­mes­tic prod­uct (GDP), and the re­vi­sion was both higher than the first es­ti­mate and higher than the expectations al­ready shown. GDP’s first re­vi­sion for the third quar­ter was a 3.2% gain, ver­sus a pre­lim­i­nary es­ti­mate of 2.9%.

Bloomberg had a con­sen­sus es­ti­mate of 3.1% on the first re­vi­sion, with an Econ­o­day range of $2.9% to 3.2%. Dow Jones (Wall Street Jour­nal) showed a con­sen­sus es­ti­mate of 3.0%.

The Bureau of Eco­nomic Anal­y­sis (BEA) in­di­cated that the re­vi­sion was based on more com­plete source data than were avail­able for the ad­vance es­ti­mate is­sued last month. The gen­eral pic­ture of eco­nomic growth re­mains the same, and the in­crease in per­sonal con­sump­tion ex­pen­di­tures was larger than pre­vi­ously es­ti­mated.

Real gross do­mes­tic in­come in­creased by 5.2% in the third quar­ter, com­pared with an in­crease of 0.7% in the sec­ond. The av­er­age of real GDP and real gross do­mes­tic in­come rose by 4.2% in the third quar­ter, ver­sus an in­crease of 1.1% in the sec­ond quar­ter.

Ac­cord­ing to the BEA, the in­crease in real GDP in the third quar­ter pri­mar­ily re­flected positive con­tri­bu­tions from per­sonal con­sump­tion ex­pen­di­tures (PCE), ex­ports, pri­vate in­ven­tory in­vest­ment and fed­eral gov­ern­ment spend­ing. Off­sets, or the ar­eas that dragged on the num­ber, were neg­a­tive con­tri­bu­tions from res­i­den­tial fixed in­vest­ment and state and lo­cal gov­ern­ment spend­ing. Also, im­ports in­creased and acted as a sub­trac­tion in GDP.

The BEA press re­lease noted: “The ac­cel­er­a­tion in real GDP in the third quar­ter pri­mar­ily re­flected an up­turn in pri­vate in­ven­tory in­vest­ment, an ac­cel­er­a­tion in ex­ports, an up­turn in fed­eral gov­ern­ment spend­ing, and smaller de­creases in state and lo­cal gov­ern­ment spend­ing and res­i­den­tial fixed in­vest­ment, that were partly off­set by a de­cel­er­a­tion in PCE, an ac­cel­er­a­tion in im­ports, and a de­cel­er­a­tion in non­res­i­den­tial fixed in­vest­ment.

“Cur­rent-dol­lar GDP in­creased 4.6%, or $207.8 bil­lion, in the third quar­ter to a level of $18,657.9 bil­lion. In the sec­ond quar­ter, cur­rent dol­lar GDP in­creased 3.7%, or $168.5 bil­lion.

“The price in­dex for gross do­mes­tic pur­chases in­creased 1.5% in the third quar­ter, com­pared with an in­crease of 2.1% in the sec­ond quar­ter. The PCE price in­dex in­creased 1.4%, com­pared with an in­crease of 2.0%. Ex­clud­ing food and en­ergy prices, the PCE price in­dex in­creased 1.7%, com­pared with an in­crease of 1.8%.”

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