Recent Updates
- US: Consumer Sentiment (Jan-prelim), Mfg & Trade Inventories & Sales (Nov), IP & Capacity Utilization, Adv Retail Sales, Producer Prices (Dec)
- US: Industrial Production Detail (Dec)
- US: Producer Price Indexes by Commodity Detail (Dec)
- more updates...
Economy in Brief
Empire State Manufacturing Index Declines in January
The Empire State Manufacturing Index of General Business Conditions decreased to 3.5 in January...
U.S. Industrial Production Continues Recovery
Industrial production advanced 1.6% in December...
U.S. PPI Rose 0.3% in December
The Producer Price Index for final demand rose 0.3% (0.8% y/y) in December...
U.S. Business Inventories Accumulate during November as Sales Weaken
Total business inventories increased 0.5% during November (-3.2% y/y)...
The EMU Trade Surplus Stabilizes
Both exports and imports have been regaining momentum...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller December 22, 2020
• Q3 GDP surge follows Q2 plunge; final demand improvement strengthened.
• Record after-tax profits' rebound is reduced.
• Prices improve as previously reported.
U.S. real GDP rose 33.4% (SAAR) during Q3'20 (-2.8% y/y), revised from a 33.1% gain previously indicated. This remained a record quarterly increase, dating back to 1947, although it followed a record 31.4% drop during the second quarter. The Action Economics Forecast Survey expected a 33.1% rise. Combined with the 5.0% decline during the first quarter, GDP remained 3.4% below Q4 2019.
The rise in Q3 domestic final sales was revised to 29.8% (-2.1% y/y) from 29.4% as the rebound in consumer spending was revised to 41.0% (-2.8% y/y) from 40.6%. Nonresidential business fixed investment growth was revised up to 22.9% (-4.5% y/y) from 21.8%. Residential investment increased 63.0% (7.2% y/y), previously 62.3%.
The 4.8% decline (+0.3% y/y) in government spending last quarter was little revised. State and local government spending fell 3.9% (-1.7% y/y) compared to a 4.0% decline reported last month. It remained the second consecutive quarterly decline, leaving spending 2.3% below the Q1 peak. A 6.2% decline (+3.6% y/y) in federal government spending followed a 16.5% Q2 jump that was driven by a 37.6% surge in nondefense outlays.
Inventory liquidation subtracted an unrevised 6.6 percentage points from GDP in Q3. Foreign trade deficit widening subtracted an unchanged 3.2 percentage points. Exports surged 59.6% (-14.6% y/y) after a 64.4% weakening in Q2 while imports rose 93.0% (-8.6% y/y) following three straight quarters of sharp decline.
Corporate profits before tax with inventory valuation (IVA) and capital consumption adjustments (CCA) rose 27.4%, not annualized (3.5% y/y). This followed the previous two quarters of double-digit decline. After-tax profits without IVA and CCA jumped 36.1% (10.3% y/y), revised from 36.6%, following sharp declines in three of the prior four quarters.
The GDP, PCE and core PCE price indices were all unrevised at 3.6%, 3.7% and 3.5% respectively in Q3. Year-on-year growth of all these measures remained well below the Fed's 2% target.
The GDP figures can be found in Haver's USECON and USNA database. USNA contains virtually all of the Bureau of Economic Analysis' detail in the national accounts. Both databases include tables of the newly published not seasonally adjusted data. The Action Economics consensus estimates can be found in AS1REPNA.
Chained 2012 $ (%, AR) | Q3'20 (3rd Estimate) | Q3'20 (2nd Estimate) | Q3'20 (Advance Estimate) | Q2'20 | Q1'20 | Q3'20 Y/Y | 2019 | 2018 | 2017 |
---|---|---|---|---|---|---|---|---|---|
Gross Domestic Product | 33.4 | 33.1 | 33.1 | -31.4 | -5.0 | -2.8 | 2.2 | 3.0 | 2.3 |
Inventory Effect (%-point) | 6.6 | 6.6 | 6.6 | -3.5 | -1.3 | -0.3 | 0.0 | 0.2 | 0.0 |
Final Sales | 25.9 | 25.6 | 25.5 | -28.1 | -3.6 | -2.6 | 2.2 | 2.8 | 2.4 |
Foreign Trade Effect (%-point) | -3.2 | -3.2 | -3.1 | 0.6 | 1.1 | -0.4 | -0.2 | -0.3 | -0.2 |
Domestic Final Sales | 29.8 | 29.4 | 29.2 | -27.1 | -4.6 | -2.1 | 2.3 | 3.0 | 2.5 |
Demand Components | |||||||||
Personal Consumption Expenditure | 41.0 | 40.6 | 40.7 | -33.2 | -6.9 | -2.8 | 2.4 | 2.7 | 2.6 |
Nonresidential Fixed Investment | 22.9 | 21.8 | 20.3 | -27.2 | -6.7 | -4.5 | 2.9 | 6.9 | 3.7 |
Residential Investment | 63.0 | 62.3 | 59.3 | -35.5 | 19.0 | 7.2 | -1.7 | -0.6 | 4.0 |
Government Spending | -4.8 | -4.9 | -4.5 | 2.5 | 1.3 | 0.3 | 2.3 | 1.8 | 0.9 |
Chain-Type Price Index | |||||||||
GDP | 3.6 | 3.6 | 3.6 | -1.8 | 1.4 | 1.1 | 1.8 | 2.4 | 1.9 |
Personal Consumption Expenditure | 3.7 | 3.7 | 3.7 | -1.6 | 1.3 | 1.2 | 1.5 | 2.1 | 1.8 |
Less Food & Energy | 3.5 | 3.5 | 3.5 | -0.8 | 1.6 | 1.4 | 1.7 | 2.0 | 1.7 |
Nonresidential Invest. | 0.1 | 0.1 | 0.2 | 0.8 | 1.0 | 0.4 | 1.3 | 0.9 | 0.9 |
Residential Invest. | 9.4 | 9.4 | 9.6 | 1.0 | 2.3 | 3.7 | 2.8 | 5.6 | 4.5 |
After-Tax Corporate Profits (%) | 36.1 | 36.6 | -- | -10.5 | -13.1 | 10.3 | 1.8 | 1.7 | 7.0 |