Global| Dec 20 2007US 3Q GDP Still Up 4.9%, Profits Still Down
by:Tom Moeller
|in:Economy in Brief
Summary
Growth in U.S. real GDP last quarter was unrevised at 4.9% (AR) after the sharp upward revision last month. The figures from the Commerce Department were as expected. Most components were little revised, including the sharp drop in [...]
Growth in U.S. real GDP last quarter was unrevised at 4.9% (AR) after the sharp upward revision last month. The figures from the Commerce Department were as expected. Most components were little revised, including the sharp drop in corporate profits.
Last quarter's growth in GDP still is estimated to have stemmed mostly (1.4 percentage points) from improvement in net exports, led by 19.1% (10.3% y/y) growth in real exports. Inventories added a revised 0.9 percentage points which was negligibly lower than estimated last month. Faster accumulation added 0.2 points to growth to 2Q growth.Corporate profits are estimated to have fallen 4.9% at an annual rate (+1.8% y/y) versus an initial read of a 4.6% decline. The housing market's decline is till estimated to have lowered the financial sector' earnings by 22.7% (AR, +2.6% y/y). Domestic nonfinancial sector profitability also fell 7.0% (AR, -8.6% y/y) as costs rose. The lower dollar boosted rest of world earnings by 38.0% (AR, 36.5% y/y). Revisions to each of these figures were moderate.
Growth in final sales to domestic purchasers was left about unchanged at 2.4%.
A revised 20.7% collapse in residential investment last quarter (AR, -15.9% y/y) was little changed and subtracted 1.1 percentage points from growth during 3Q.
Strength in business fixed investment continued and was little revised at 8.7% (6.0% y/y). That added 1.0 percentage points to 3Q growth. Spending on structures grew 17.0% (16.1% y/y) and spending on equipment & software grew 5.1% (AR, 1.8% y/y).
Growth in real personal consumption expenditures was little changed at 2.8% (2.9% y/y) but it still was double growth during 2Q.
The GDP chain price index was little changed at a 1.0%.
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| Chained 2000$, % AR | 3Q '07 Final |
3Q '07 Preliminary | 3Q ' 07 Advance |
2Q '07 | Y/Y | 2006 | 2005 | 2004 |
|---|---|---|---|---|---|---|---|---|
| GDP | 4.9 | 4.9 | 3.9 | 3.8 | 2.8 | 2.9 | 3.1 | 3.6 |
| Inventory Effect | 0.9 | 1.0 | 0.4 | 0.2 | -0.4 | 0.1 | -0.2 | 0.4 |
| Final Sales | 4.0 | 3.9 | 3.5 | 3.6 | 3.1 | 2.8 | 3.3 | 3.3 |
| Foreign Trade Effect | 1.4 | 1.4 | 0.9 | 1.3 | 0.9 | -0.1 | -0.2 | -0.7 |
| Domestic Final Demand | 2.5 | 2.4 | 2.5 | 2.1 | 2.1 | 2.7 | 3.3 | 3.8 |
| Chained GDP Price Index | 1.0 | 0.9 | 0.8 | 2.6 | 2.4 | 2.6 | 1.7 | 2.1 |
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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