Thursday, October 30, 2014 9:39:08 AM
GDP
Released On 10/30/2014 8:30:00 AM For Q3a:2014
Prior Consensus Consensus Range Actual
Real GDP - Q/Q change - SAAR 4.6 % 3.0 % 2.1 % to 3.5 % 3.5 %
GDP price index - Q/Q change - SAAR 2.1 % 1.4 % 1.0 % to 1.8 % 1.3 %
Highlights
Third quarter GDP growth decelerated after a second quarter jump related to make up activity after the first quarter decline due to atypically adverse winter weather. The advance estimate for the third quarter posted at a moderately healthy 3.5 percent annualized, following 4.6 percent boost in the second quarter. The median forecast was for 3.0 percent.
Final sales of domestic product increased a healthy 4.2 percent after gaining 3.2 percent in the second quarter. Final sales to domestic purchasers rose 2.7 percent in the third quarter, compared to 3.4 percent in the second quarter.
The increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, nonresidential fixed investment, federal government spending, and state and local government spending that were partly offset by a negative contribution from private inventory investment. Imports, which are a subtraction in the calculation of GDP, decreased.
GDP data are still being affected by the atypically severe winter weather in the first quarter as the third quarter returns to normal conditions after a second quarter recovery. The notable negative for the third quarter was a drop in inventory investment and a slowdown in consumer spending growth. Both were strong in the second quarter. The deceleration in the percent change in real GDP reflected a downturn in private inventory investment and decelerations in PCE, in nonresidential fixed investment, in exports, in state and local government spending, and in residential fixed investment that were partly offset by a downturn in imports and an upturn in federal government spending.
On the price front, the chain-weighted price index decelerated to 1.3 percent annualized from 2.1 percent in the second quarter. Analysts projected 1.4 percent. The core chain index, excluding food and energy, eased to 1.6 percent from 1.8 percent in the second quarter.
Overall, economic growth is somewhat better than expected. This is good news for company profits as reflected in recently better-than-expected earnings on average. But the third quarter GDP figure will raise debate within the Fed on moving forward or not the first increase in the fed funds rate.
Real GDP growth is always quoted at a quarterly annual rate. It measures how much the economy has grown over a three-month period. Quarterly growth rates are often volatile; consequently, economists also like to look at the year-over-year growth in GDP. The yearly changes tend to be more stable.
Data Source: Haver Analytics
It is common to compare quarterly changes at annual rates in the GDP deflator. These can be volatile, just like the quarterly swings in real GDP growth; as a result, the trend in inflation is better determined by year- over- year changes.
Data Source: Haver Analytics
Released On 10/30/2014 8:30:00 AM For Q3a:2014
Prior Consensus Consensus Range Actual
Real GDP - Q/Q change - SAAR 4.6 % 3.0 % 2.1 % to 3.5 % 3.5 %
GDP price index - Q/Q change - SAAR 2.1 % 1.4 % 1.0 % to 1.8 % 1.3 %
Highlights
Third quarter GDP growth decelerated after a second quarter jump related to make up activity after the first quarter decline due to atypically adverse winter weather. The advance estimate for the third quarter posted at a moderately healthy 3.5 percent annualized, following 4.6 percent boost in the second quarter. The median forecast was for 3.0 percent.
Final sales of domestic product increased a healthy 4.2 percent after gaining 3.2 percent in the second quarter. Final sales to domestic purchasers rose 2.7 percent in the third quarter, compared to 3.4 percent in the second quarter.
The increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, nonresidential fixed investment, federal government spending, and state and local government spending that were partly offset by a negative contribution from private inventory investment. Imports, which are a subtraction in the calculation of GDP, decreased.
GDP data are still being affected by the atypically severe winter weather in the first quarter as the third quarter returns to normal conditions after a second quarter recovery. The notable negative for the third quarter was a drop in inventory investment and a slowdown in consumer spending growth. Both were strong in the second quarter. The deceleration in the percent change in real GDP reflected a downturn in private inventory investment and decelerations in PCE, in nonresidential fixed investment, in exports, in state and local government spending, and in residential fixed investment that were partly offset by a downturn in imports and an upturn in federal government spending.
On the price front, the chain-weighted price index decelerated to 1.3 percent annualized from 2.1 percent in the second quarter. Analysts projected 1.4 percent. The core chain index, excluding food and energy, eased to 1.6 percent from 1.8 percent in the second quarter.
Overall, economic growth is somewhat better than expected. This is good news for company profits as reflected in recently better-than-expected earnings on average. But the third quarter GDP figure will raise debate within the Fed on moving forward or not the first increase in the fed funds rate.
Real GDP growth is always quoted at a quarterly annual rate. It measures how much the economy has grown over a three-month period. Quarterly growth rates are often volatile; consequently, economists also like to look at the year-over-year growth in GDP. The yearly changes tend to be more stable.
Data Source: Haver Analytics
It is common to compare quarterly changes at annual rates in the GDP deflator. These can be volatile, just like the quarterly swings in real GDP growth; as a result, the trend in inflation is better determined by year- over- year changes.
Data Source: Haver Analytics
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