US Q3 GDP Revised Higher To 3.2%, Beating Expectations, On Stronger Consumer Spending

Tyler Durden's picture

The unexpected economic growth spurt continued in the third quarter, when real GDP rose 3.2% according to the “second” estimate released by the Bureau of Economic Analysis, beating estimates of a 3.0% print, and 0.3% higher than the “advance” estimate released in October. This was the highest quarterly growth rate since the third quarter of 2014.

The revision was at the top of the forecast range and still the strongest quarter in two years. The PCE price index was a 1.4% annual rate, unchanged from the original Oct. 28 report and the core PCE price index stayed at 1.7%.

The upward revision to third-quarter GDP growth reflected upward revisions to consumer spending and to housing investment that were partly offset by downward revisions to business investment and to inventory investment.

The details of the revision showed the upward revision to consumer spending was in  both goods and services, with the goods measure benefiting from a tick  up in the "other" category of nondurables and to motor vehicles and  parts. In services, the upgrade was primarily to housing and utilities.

The upward adjustment in residential fixed investment was mainly  attributed to single family housing. On the nonresidential side there  were downward revisions to equipment and intellectual property  products,  partially offset by and upward revision to nonresidential structures.

For inventories, there were downward adjustments in construction, mining, utilities and manufacturing.

Some highlights: personal consumption expenditures rose an upward revised 2.8% in the third quarter, a deceleration from the 4.3% rise in the second quarter but better than the 1.6% gain in the first quarter, and higher than expected.  The increase reflected an increase in consumer spending on household services, notably on housing and utilities. Consumer spending on durable goods also increased, notably on motor vehicles and parts. However, spending on nondurable goods declined.

Exports of goods increased, notably in foods, feeds, and beverages and in consumer durable goods. Exports of services increased, mainly in travel. In addition, private inventory investment and federal government spending increased. Offsetting these contributions to growth, housing investment and state and local government spending declined.

Overall the picture remained the same, with acceleration in private inventory investment, exports and federal government spending along with smaller decreases in state/local govt spending and a  deceleration in nonresidential fixed investment.

One notable highlight in the report was that corporate profits increased 6.6% at a quarterly rate in the third quarter after decreasing 0.6% in the second quarter. This was the highest print in over three years, approaching the nearly 8% increase in Q2 2013.

Profits of domestic nonfinancial corporations increased 6.5% after decreasing 4.6%, a surprising swing higher. Profits of domestic financial corporations rose 11.5% after rising 1.3 percent. Profits from the rest of the world increased 1.6% after increasing 10.3%. Over the last 4 quarters, corporate profits increased 2.8%.

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JRobby's picture

This seems like a valid story.......

Looney's picture

Slightly OT…

It looks like 0bama, before leaving office, decided to “repair” our relations with the Philippines the only way he knows how…

Nine members of Philippines President Rodrigo Duterte's security team have been injured after their convoy was hit by an explosive device. President Duterte was not with the convoy.

We, of course, never (wink-wink) assassinate foreign leaders, so this assassination attempt will be promptly blamed on the locals.   ;-)

Looney

NoDebt's picture

So Obama can say he saw growth greater than 3% sometime in his presidency.

Believe these numbers at your own peril.  I still expect a lot of "unexpected downward revisions" on 2016 after Trump takes the oath of office.

 

 

onewayticket2's picture

it's an FU to the incomming president.  

LawsofPhysics's picture

Yes, more to the point regarding The Fed...

Claiming a 3% GDP while the FFR remains pegged near ZERO!!!!!!!

"apolitical" and "data-dependent"...  LMFAO!!!!!!!

 

"Full faith and credit"

JRobby's picture

Full on insanity. But then, wait until next week........

They count on full ignorance of the mathematical relationships involved. By design.

Oldwood's picture

Is there ANY corelation between a rising deficit governmental spending....on top of record tax revenues, and an "improved" GDP?

Just curious...

JRobby's picture

Of course he did!

The Big Lie will continue to be perpetrated until all control mechanisms are smashed.

Pairadimes's picture

Now that prostitution and illegal drug sales are getting counted in GDP estimates, governments will never have to admit to a recession ever again.

BabaLooey's picture
"US Q3 GDP Revised Higher To 3.2%, Beating Expectations, On Stronger Consumer Spending"

LOL

Just.....fucking.......LOL

Nigga fucking PLEEEASE!

Truther's picture

Fuck you Janet, along with the Fed Whores.

LawsofPhysics's picture

The "all clear" being given for the Fed's rate hike...

 

Anything to make the collapse look like "Trump's fault"...

Sages wife's picture

Ed Zachary. The establishment has far more effective tools for instigating financial turmoil than suppressing it.

LawsofPhysics's picture

Yes, and timing is everything as it's all about maintaining power and control.

 

"Full faith and credit"...

same as it ever was...

ejmoosa's picture

They are indeed giving themselves the all clear.  But if you dig deeper into the numbers you will see that profits after taxes for the last four quarters are down 7.48%.

Exactly how long do they expect the economy to grow while profits are down so drastically?

 

We've not seen the normal ebb and flow of corporate profits at rates of increasese and declines since before the last recession.  Since then it was just a giant spike up and then  a steady erosion down to the levels we are seeing today.

EuroPox's picture

It must have been the unusually cold September weather that sent people out to shop ... no wait, that keeps them at home doesn't it?

SallySnyd's picture

Here is an article that explains the relationship between Washington’s debt and slower GDP growth:

 

http://viableopposition.blogspot.ca/2016/11/the-public-debt-gdp-growth-gap.html

 

Washington thinks nothing about continuing to mortgage the future for the present.

silentlurker's picture

Clearly justifies the rate hike Yellen will impose in Decmeber.

 

I'd imagine the economy will tank in late January - clearly Trump's fault.

 

Get the popcorn ready, it will be an interesting year.

MFL5591's picture

The Tribal set up is in!

crackerjack_finance's picture

The market si perceiving everything to be bullish.

Some more on the implications from Trump, longer term, the good and bad....

http://crackerjackfinance.com/2016/11/turkey-day-highs/

 

NDXTrader's picture

Call me a wild eyed optimist, but I really want to believe our economic numbers are calculated by non-political bureaucrats that just crunch them and let the chips fall where they may. LOL. Whew, now that I got that out of my system - Obama needed one 3% growth quarter, and Obama got his 3% growth quarter

hotrod's picture

Well hell why wasn't Obama/Hillary re-elected and why interest rates so low???  USA on Fire.  Japan could not do it, Europe could not do it, No one but the USA.  A comeback for the ages.

Davidduke2000's picture

Miracles happen to the thug of chicago, on his last month in office the economy is booming while everybody is so miserable that they voted the liars out.

hotrod's picture

We have lift off, all those green shoots are growing.  Obama has done it and we sent the DNC packing.  How stupid we were.

bada boom's picture

What was everybody buying, end of the world preparations due to the election?

NugginFuts's picture

"Lead bullion" in preparation for Madam President's war on 2A rights....

orangegeek's picture

LMFAO!!!!

 

Now barry gets his "3% threshold" so he doesn't go down as a economic failure as well.

 

What a fraud.

silverer's picture

Don't get too excited for Barry. It's just a quarter, not the whole year. He benefits from the "Trump effect".

Everybodys All American's picture

And if you believe that one ... then you will believe dang near anything.

Shed Boy's picture

Pure propaganda. Reason: NO discussion of WHO is spending all this money. Americans are tapped out. It's all foreigners converting their money and spending it here. Case in point: This last summer I visited a dozen National parks. WHO was filling these parks? WHO were the tourists? NOT AMERICANS! Most were Europeans, Asians, Middle Easterns. We hit Zions Park on 4th of July...and I was a handful of people that spoke english. WHOSE buying up the housing? Chinese!

Revise all you want...But the bottom line is that the money is coming from OUTSIDE America. Joe average American is too broke to go see things in his own country and too fat and lazy to go camping, So all the other countries that are now wealthy are coming here to "see America".

LawsofPhysics's picture

"So all the other countries that are now wealthy are coming here to "BUY America". - fixed it for you!!!

sinbad2's picture

 "BUY America"

I'll give ya 3 fiddy for your Loch Ness monster?

TomGa's picture

Not bullish but bullshitist.

gsp9993's picture

Ok, lets cut the crap.  Nearly a third of this "increase" is due to the unexpected increase in corn and soybean exports due to a severe growing season in South America.   These exports come from surplus grain bin shipments to other countries and should not be considered an increase in revenue.

 

Just another "fake" news story.  Without these exports GNP increases by only 2.2% 

LawsofPhysics's picture

Yes.  But hey, there is indeed a shelf life on those soybeans and I will indeed have a "Merry Christmas"...

silverer's picture

That, plus any new Obamacare increases.

sinbad2's picture

And even the 2.2% is because they massage the numbers. US GDP would have been negative since 2008, if not for some truly artistic accounting practices.

gatorengineer's picture

Its nice to see Bam Bam leaving town with the same fake numbers that he came in with...... who could possibly believe this shit?

I could see a kicker to it due to guns and ammo purchases, which will now fall off a cliff

Ok record ag crop record exports to China got that.... but single family housing?  Give me a fucking break...

dimwitted economist's picture

This Obama recovery is Fucking great!

so why did trump win again?

NugginFuts's picture

Obama: "Hey, everything was great until that guy Trump came along and ruined everything. Do you miss me yet????"

 

If you like your legacy, you can keep your legacy.