by Mish

The acceleration in real GDP growth in the third quarter reflected an upturn in private inventory investment, an acceleration in exports, a smaller decrease in state and local government spending, and an upturn in federal government spending. These were partly offset by a smaller increase in PCE, and a larger increase in imports.

Exports surged 10%, imports 2.3%.

Real GDP

Doug Short at Advisor perspectives provides his usual fine display of charts in Q3 GDP Advance Estimate: A Surprisingly Strong 2.9%

The above chart shows the annualized% change from the preceding quarter in Real (inflation-adjusted) Gross Domestic Product and recessions as determined by the National Bureau of Economic Research (NBER). Also illustrated are the 3.22% average (arithmetic mean) and the 10-year moving average, currently at 1.39%.

Real GDP Historic Trend

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Real Quarterly GDP Year-Over-Year Percent Change

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A particularly telling representation of slowing growth in the US economy is the year-over-year rate of change. The average rate at the start of recessions is 3.35%. Ten of the eleven recessions over this timeframe have begun at a higher level of real YoY GDP.

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The above three charts courtesy of Doug Short and Advisor Perspectives.

GDP Estimates

  • GDPNow 3rd Quarter: 2.1%
  • FRBNY Nowcast 3rd Quarter: 2.2%
  • Markit 3rd Quarter: 1.0%
  • Econoday 3rd quarter consensus: 2.5%

It’s far too early to proclaim a winner. Revisions explain why.

Expect Revisions

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The average revision from Advance to the Second estimate is 0.5 percentage points, in either direction.

Because of ongoing revisions, the average change from advance to the latest estimate is a whopping 1.1 percentage points, perhaps years or even a decade later.

For now, unless data weakens considerably between now and the December FOMC meeting, the Fed is going to get in a December rate hike.

Meanwhile, a surging US dollar is likely to dampen export growth for the 4th quarter.

Mike “Mish” Shedlock

Hype Over GDP Statistical Noise

The BEA’s second estimate of Third Quarter GDP came in at 3.2% up from 2.9% in the advance (first) estimate.

GDP a strong 4.1%, Saving Rate Revised Much Higher, Talk of Overheating

The BEA released the 2nd Quarter 2018 GDP (Advance Estimate) including a Comprehensive Update: 1929 Through 2018 Q1.

Final Model Forecasts for First Quarter GDP: GDPNow 2.0%, Nowcast 2.9%

The advance (first) estimate of first-quarter GDP is published tomorrow. The GDPNow final estimate is 2.0%, Nowcast 2.9%

Real 3rd-Quarter GDP 3.0%, Inventories Provide Boost: Personal Income Decelerates

Real gross domestic product (GDP) increased at an annual rate of 3.0 percent in the third quarter of 2017, according to the "advance" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 3.1 percent.

New Home Sales a Bit Short of Expectations, May Revised Lower

New home sales came in at a seasonally adjusted annualized rate of 610,000 units, just short of the Econoday consensus of 611,000.

Six GDP Estimates (Three Revised Today): ZeroHedge, Mish, GDPNow, Nowcast, ISM, Markit

Tomorrow the BEA will release its advance GDP number for first quarter GDP. I revised my estimate today as did ZeroHedge and GDPNow. The lowest estimate in the group is GDPNow at 0.2%. Here are the numbers starting with GDPNow.

Fourth-Quarter GDP Final Estimate Hits 2.9%,Tops Consensus

The third estimate of fourth-quarter GDP is 2.9%, up 0.4 percentage points from the second estimate.

GDP at 3.1 Percent as Consensus Expected

Despite downward construction and spending revisions last month, the BEA reported second-quarter GDP came in at the consensus estimate of 3.1 percent.

2nd Quarter GDP Revised Up to 3.0%, Annualized Inflation 1.0%

In its second of three estimates, the BEA revised second-quarter GDP up to 3.0% from 1.2%. The consensus was 2.8%.