Replies to post #620083 on *SCALPSWINGSTRADDLE* ($$$)

[Zephyr]

GDP
Released On 11/7/2013 8:30:00 AM For Q3a:2013
Prior Consensus Consensus Range Actual
Real GDP - Q/Q change - SAAR 2.5 % 2.0 % 1.5 % to 2.7 % 2.8 %
GDP price index - Q/Q change - SAAR 0.6 % 1.4 % 0.9 % to 1.9 % 1.9 %
Highlights
GDP growth for the third quarter surprised on the high side but inventories played a big role. Real GDP grew 2.8 percent in the third quarter, following a 2.5 percent rise the quarter before. Analysts projected a 2.0 percent rise.

By contributions to growth, it was a mix. PCEs rose an annualized 1.5 percent, contributing 1.04 percentage points to GDP. Inventories gained $86.0 billion, following a $56.6 billion increase in the second quarter-leading to a third quarter contribution of 0.83 percentage points.

However, PCEs slowed for the quarter after a 1.8 percent increase in the second quarter. Net exports played a notable role in the boost to GDP growth but in the wrong way. Import growth decelerated to 1.9 percent, following a 6.9 percent jump in the second quarter. Essentially, demand slowed. Exports grew but at a slower pace of 4.5 percent versus 8.0 percent in the second quarter.

Housing investment remained healthy as did nonresidential structures. Equipment investment slipped while government purchases were basically flat.

But overall demand is sluggish. Final sales of domestic product rose 2.0 percent in the third quarter after a 2.1 percent increase the prior period. Final sales to domestic purchasers softened to a 1.7 percent gain, following a 2.1 percent rise in the second quarter.

Inflation was a little warmer than expected. The overall GDP price index rose 1.9 percent, following a 0.6 percent annualized gain in the second quarter. Market expectations were for a 1.4 percent annualized gain. Excluding food and energy, inflation was 1.9 percent in the third quarter, following a 0.9 percent rise the previous quarter.

Overall, the economy is not as strong as the headline suggests. We may see some pullback in the fourth quarter on inventories. On the news, equities were little changed.