·
US real GDP growth for 3Q was revised down slightly to 4.1% (AR) and
fell short of Consensus expectations for no change to earlier estimate
of 4.3% growth.
· A weakened estimate of domestic demand growth caused the downward revision. Real PCE was lessened to 4.1% (3.8% y/y) from 4.3% growth and the strength in business fixed investment was lessened to 8.4% (8.3% y/y) from 8.7%. Lastly, growth in residential investment growth was dropped to 7.3% (7.2% y/y) from 8.4%.
· The estimate of inventories contribution to GDP growth was unrevised at -0.4 percentage points but the drag from the foreign trade deficit was lessened as exports grew 2.5% (6.9% y/y).
· The chain price index was
revised up to 3.3% from 3.0% and the price index for domestic final
sales rose 4.3% (3.4% y/y).
· Operating corporate profits are estimated to have declined 4.0% (+15.7% y/y) versus an initial estimate of a 3.4% decline. Financial sector earnings were reduced further and fell 20.5% (+5.4% y/y), crushed by three hurricanes. Profits of domestic nonfinancial corporations also were reduced and fell 1.1% (+18.6% y/y) versus the initial estimate of a slight 0.2% gain.
· Shifting Data: A Challenge for Monetary Policy Makers from the Federal Reserve Bank of San Francisco is available here.
· Greenspan's Unconventional View of the Long-Run Inflation/Output Trade-off from the Federal Reserve Bank of St. Louis can be found here.