by Mish

Let’s start with more numbers from today before finishing off with what we know so far.

The Census Bureau Report on Advance Economic Indicators shows wholesale inventories rose 0.4% in July.

Retail inventories fell by 0.2% from an unrevised June estimate. The Census Bureau revised wholesale inventories slightly lower from 0.7% to 0.6%.

Wholesale inventories gave a late upward boost to second quarter GDP.

Average this out and you have a 0.1% rise in both wholesale and retail inventories or 0.2% in one and nothing in the other.

This is a slight positive to third quarter GDP, subject to revisions, and further subject to Hurricane Harvey disruptions.

Slow Start to Third Quarter


Image placeholder title

So far, the third quarter is not off to a great start.

The housing reports were worse than expected, today’s reports on international trade and inventories will not impact GDP much, the durable goods report was mixed despite a miserable headline number, and industrial production was weak.

Retail spending rose sharply in July, assuming one actually believes the August 15 Census Bureau report on retail spending that shows auto sales rose 1.2%. I don’t.

Cracks such as rising credit card delinquencies and more believable report on slowing auto sales have popped up.

Finally, Trump’s increasingly belligerent position on trade is very worrying. For details, please see Trump Rant of the Day: “I want tariffs. Bring me some tariffs!”

Mike “Mish” Shedlock

Third Estimate of 4th Quarter GDP is 2.1%

Given that GDP is one of the most revised measures, the BEA renamed “final” to “third”. The third estimate is 2.1% just a tick over the Econoday consensus estimate of 2.0%.

Third-Quarter GDP Revised Slightly Lower in 3rd Estimate: What's Next?

In its third and final estimate of the third-quarter GDP, the economy grew at 3.2%. The revision is statistical noise.

Third-Quarter GDP Hits Consensus 3.3% Estimate

The BEA reported the second estimate of third-quarter GDP was 3.3%. The report matched the Econoday consensus.

3rd Quarter GDP Estimates Collapse

In the wake of today’s economic reports, third-quarter GDP estimates from the Atlanta Fed GDPNow model and the New York Fed Nowcast model each plunged 0.8 percentage points.

Third Quarter GDP 3.5%, Much Weaker Than it Looks: Inventory Adjustment 2.07%

GDPNow nailed the first estimate of third-quarter GDP. The BEA reports 3.5% with inventories accounting for 2.07 points.

2nd Quarter GDP Final Estimate Tomorrow: Up or Down from Prior?

The BEA’s third (final) estimate of second-quarter GDP is due Thursday. The Econoday consensus is the BEA will up the reading to 3.1% from 3.0%.

Despite Robust Retail Sales, the GDPNow Forecast of Third-Quarter GDP Declined

On Friday, GDPNow lowered its third-quarter GDP estimate from 2.3% to 2.0%

Third-Quarter GDP Forecasts: GDPNow 2.5%, Nowcast 1.5%

The volatility of GDPNow vs Nowcast is once again on display in recent weeks.

Markit vs. ISM Services: Markit Economist Sticks with 1% Third Quarter GDP Estimate

On many days there are no economic reports. On some days, like today, there are many reports.