Global| Nov 22 2011U.S. GDP Growth Revised Slightly Lower; Profits Rise Moderately
by:Tom Moeller
|in:Economy in Brief
Summary
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 [...]
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 |
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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