Today's U.S. reports revealed upside surprises across the advance August trade and inventory data, alongside another lean weekly initial claims reading that substantially lifted growth prospects for Q3, following the largely expected Q2 boost in GDP growth to 1.4% from 1.1%. The good news was only modestly trimmed by a 2.4% August pending home sales drop. For the advance report, analysts saw a drop in the August goods deficit to $59.3 B that reflected both strong exports and weak imports, leaving a hike in the likely net export contribution to Q3 GDP growth to $29 B from $8 B previously, with a robust 8% "real" growth rate for exports. For inventories, a big 0.5% retail rise, alongside a 0.1% wholesale drop, supports a likely 0.2% business inventory increase in August. It now appears that the Q3 GDP report will capture at least some lift from a diminished inventory headwind into the end of the year, as analysts discussed in Monday's commentary, and analysts raised our Q3 GDP growth estimate to 2.8% from 2.2%
