When a month ago, the BEA released its first revision to Q3 GDP, the lament from even the biggest sycophants of data manipulation was that the bounce in estimated Q3 economic output from 2.84% to 3.61% was driven entirely by inventory accumulation, while personal consumption as a % of the final GDP number actually declined from 1.04% to 0.96%.Sequentially, the ever missing personal consumption was revised up 2% vs the estimated up 1.4%, far above the highest estimate of 1.6%, and also the prior 1.4% print.
Which is why absolutely nobody was surprised to see the BEA mysteriously keep virtually every other GDP component unchanged but boost Personal Consumption Expenditures from 0.96% of GDP to 1.36%. The end result is that the GDP reported in the first revision number has been boosted once again to a simply ludicrous 4.1%, smashing expectations of a 3.6% print. Putting this "revision" in perspective, the final GDP is now 45% higher than the first GDP estimate of 2.84%, and there is a whopping 1.5% delta between the first and final revision, which in our record books is the biggest revision on record.
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What can one say: close enough for government data-fudging work.
Some additional data in the GDP release:
Corporate Profits
Profits from current production (corporate profits with inventory valuation adjustment (IVA) and capital consumption adjustment (CCAdj)) increased $39.2 billion in the third quarter, compared with an increase of $66.8 billion in the second. Taxes on corporate income decreased $0.4 billion, in contrast to an increase of $10.0 billion. Profits after tax with IVA and CC Adj increased $39.5 billion, compared with an increase of $56.9 billion.
Dividends decreased $179.0 billion in the third quarter, in contrast to an increase of $273.5 billion in the second. The large third-quarter decrease primarily reflected dividends paid by Fannie Mae to the federal government in the second quarter. Undistributed profits increased $218.6 billion, in contrast to a decrease of $216.6 billion. Net cash flow with IVA -- the internal funds available tocorporations for investment -- increased $231.1 billion, in contrast to a decrease of $205.3 billion.
Corporate profits by industry
Domestic profits of financial corporations increased $9.7 billion in the third quarter, compared with an increase of $24.5 billion in the second. Domestic profits of nonfinancial corporations increased $12.7 billion, compared with an increase of $37.8 billion. The increase in profits of financial corporations reflected increases in both Federal Reserve banks and "other" financial industries. The increase in nonfinancial corporations primarily reflected increases in manufacturing and in "other" nonfinancial corporations that were partly offset by a decrease in information. Within manufacturing, the largest increases were in "other" durable goods and in food and beverage and tobacco products. These increases were partly offset by decreases in petroleum and coal products and in chemical products.
The rest-of-the-world component of profits increased $16.7 billion in the third quarter, compared with an increase of $4.6 billion in the second. This measure is calculated as the difference between receipts from the rest of the world and payments to the rest of the world.