Recent Updates

  • UK: **Retail Sales rebased to 2016=100**
  • Ireland: **GDP Rereferenced to Chained 2016 Euros**
  • US: Composite Indexes (Jun)
  • Canada: Employment Insurance (May), Nonres Building Construction (Q2)
  • US: Philadelphia Fed Business Outlook (Jul)
  • Ireland: BOP (Q1)
  • Jordan: Tourism; Egypt: Foreign Trade Summary (May)
  • UK: Retail Sales (Jun), RICS Commercial Market Survey (Q2)
  • Germany: Public Sector Finance (Q1)
  • more updates...

Economy in Brief

U.S. GDP Growth Revised Slightly Lower; Profits Rise Moderately
by Tom Moeller November 22, 2011

Real GDP grew at a revised 2.0% annual rate in Q3 versus the Advance estimate of 2.5% growth. The figure fell short of Consensus expectations for an unrevised 2.5% rate of growth. It remained, however, the strongest quarterly growth since 4Q'10. Continuing to lead growth was business fixed investment.

Accompanying the GDP numbers was the first look at corporate profits. They grew at an 8.5% annual rate (7.9% y/y) which was off from 13.7% growth during Q2. Domestic nonfinancial earnings grew at a 6.6% rate (11.5% y/y) which was down from a more than one-third Q2 rise. Financial sector earnings grew at a 16.2% rate (-5.4% y/y) while net earnings from abroad grew 5.9% (14.3% y/y).  

A deepened rate of inventory drawdown accounted for most of the revision to GDP growth. It was lessened to a 1.6 percentage point subtraction from  growth versus the initial estimate of 1.1 points. Offsetting this was a 0.5 percentage point addition from improved net exports, revised up from 0.2 points. Exports grew at a 4.3% rate (5.9% y/y) and imports ticked up at a 0.5% rate (1.9% y/y). 

Growth in domestic final demand was taken down a notch to 3.0% (1.8% y/y) from 3.2% reported initially. Last quarter's growth still was led by a 14.8% jump (8.9% y/y) in business fixed investment, its strongest in five quarters. Personal consumption growth rose a little-changed 2.3% (2.2% y/y) which was boosted by firmer growth in home furnishings & other durables (5.2% y/y) as well as services (1.7% y/y). Residential investment growth also was lessened to 1.6% (1.4% y/y).

The chain price index was unrevised at a 2.5% rate of increase. Nevertheless, this rate of growth is double that in 2010. The PCE deflator grew at a 2.3% rate (2.9% y/y) while business fixed investment prices rose at a 1.6% rate (1.5% y/y). Residential investment prices ticked up at a 0.3% rate (1.6% y/y).

The latest GDP figures can be found in Haver's USECON and USNA databases; USNA contains basically all of the Bureau of Economic Analysis' detail on the national accounts, including the new integrated economics accounts and the recently added GDP data for U.S. Territories. The Consensus estimates can be found in AS1REPNA.

Unconventional Monetary Policy: Lessons from the Past Three Years from the Federal Reserve Bank of San Francisco is available here.

Chained 2005 $, % AR Q3'11 (2nd. Estimate) Q3'11 (Advance) Q2'11 Q1'11 Q3'11
Y/Y
2010 2009 2008
Gross Domestic Product 2.0 2.5 1.3 0.4 1.5 3.0 -3.5 -0.3
  Inventory Effect -1.6 -1.1 -0.3 0.3 -0.9 1.6 -0.8 -0.5
Final Sales 3.6 3.6 1.6 0.0 2.4 1.4 -2.6 0.2
  Foreign Trade Effect 0.5 0.2 0.2 -0.3 0.4 -0.4 1.0 1.2
Domestic Final Sales 3.0 3.2 1.3 0.4 1.8 1.8 -3.6 -1.0
Demand Components
Personal Consumption 2.3 2.4 0.7 2.1 2.2 2.0 -1.9 -0.6
Business Fixed Investment 14.8 16.3 10.3 2.1 8.9 4.4 -17.9 -0.8
Residential Investment 1.6 2.4 4.2 -2.4 1.4 -4.3 -22.2 -23.9
Government Spending -0.1 0.0 -0.9 -5.9 -2.4 0.7 1.7 2.6
Chain-Type Price Index
GDP 2.5 2.5 2.5 2.5 2.4 1.2 1.1 2.2
Final Sales of Domestic Product 2.6 2.6 2.5 2.4 2.3 1.2 1.0 2.2
Final Sales to Domestic Purchasers 2.0 2.0 3.4 3.9 2.8 1.5 -0.1 3.3
close
large image