Global| Nov 29 2017U.S. GDP Growth is Revised Up; Profits Strengthen
by:Tom Moeller
|in:Economy in Brief
Summary
Economic growth was revised up to 3.3% (AR, 2.3% y/y) during Q3'17 from an advance estimate of a 3.0% gain. The latest figure was the strongest in three years and equaled expectations in the Action Economics Forecast Survey. After-tax [...]
Economic growth was revised up to 3.3% (AR, 2.3% y/y) during Q3'17 from an advance estimate of a 3.0% gain. The latest figure was the strongest in three years and equaled expectations in the Action Economics Forecast Survey.
After-tax corporate profits increased 4.9% (10.0% y/y) following a 2.0% decline. Profits without IVA & CCA gained 4.3% (5.4% y/y). Earnings in the domestic financial sector strengthened 13.7% (13.2% y/y) while nonfinancial U.S. earnings improved 1.0% (4.5% y/y). Foreign sector profits increased 4.5% (11.8% y/y).
The change in business inventories added 0.8 percentage point to growth last quarter, revised from 0.7 point. Improvement in net exports also was revised up to 0.5 percentage point from 0.4. Exports grew 2.2% (2.2% y/y). Imports fell 1.1% (+3.1% y/y), the first decline since Q1'16.
Domestic final sales growth was raised to 2.0% (2.3% y/y) from 1.8%, but it remained the weakest advance since Q1'16.
Business fixed investment grew 4.7% (4.6% y/y), revised from 3.9%, after a 6.7% rise. Equipment spending grew an increased 10.4% (6.3% y/y) as investment in information processing equipment rose 10.4% (8.0% y/y). Industrial equipment investment grew 7.5% (8.1% y/y) and intellectual property product investment improved 5.8% (3.7% y/y). Growth in these latter two categories was revised up. Structures investment fell by a deeper 6.8% (+2.9% y/y), the first decline in three quarters.
Government sector spending improved 0.4% (-0.1% y/y), revised from -0.1%. State & local government spending slipped 0.1% (-0.1% y/y), revised from -0.9%. Federal government investment increased a little-changed 1.3% (0.1% y/y). Defense spending grew 2.4% (0.1% y/y) after a 4.7% rise. Nondefense spending eased 0.4% (0.0% y/y), off for the third straight quarter.
Consumer spending growth slowed to 2.3% (2.6% y/y), revised from 2.4%, versus 3.3% growth in Q2 as nondurable goods consumption more than halved their Q2 growth to 2.0% (2.5% y/y). Gasoline & fuel oil consumption declined 3.3% (-0.9% y/y) while clothing purchases fell 0.7% (+1.6% y/y. Durable goods consumption growth quickened to 8.1% (6.1% y/y) as motor vehicle sales strengthened 12.6% (3.8% y/y). Spending on home furnishings and appliances grew 7.9% (6.7% y/y), but recreational goods purchases eased 0.2% (+8.5 y/y) following three straight quarters of double-digit growth. Services spending grew 1.5% (2.1% y/y), the weakest quarterly gain in four years. Housing and utilities spending held steady (0.5% y/y) after strengthening 3.4%. Recreation spending improved 4.1% (3.1% y/y) while restaurant & hotel expenditures rose 2.1% (1.0% y/y).
Residential investment fell a lessened 5.1% (+1.1% y/y) following a 7.3% decline in Q2.
The GDP price index rose a little-changed 2.1% (1.8% y/y). The personal consumption price index rose an unchanged 1.5% (1.5% y/y), up from the 0.3% Q2 increase. The business fixed investment price index rose 1.2% (1.3% y/y).
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, including the integrated economic accounts and the recently added GDP data for U.S. Territories. The Action Economics consensus estimates can be found in AS1REPNA.
The Current Economic Outlook and Monetary Policy from Fed Chair Janet L. Yellen can be found here.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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