The first two readings on third-quarter GDP were an annualized 2.8% and 3.6%, respectively. Almost half of the second reading consisted of inventory growth.
The report will be here at 8:30.
HERE IT IS (permanent link):
Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 4.1 percent in the third quarter of 2013 (that is, from the second quarter to the third quarter), according to the “third” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 2.5 percent.
The GDP estimate released today is based on more complete source data than were available for the “second” estimate issued on December 5, 2103. In the second estimate, the increase in real GDP was 3.6 percent (see “Revisions” on page 3). With this third estimate for the third quarter, increases in personal consumption expenditures (PCE) and in nonresidential fixed investment were larger than previously estimated.
The increase in real GDP in the third quarter primarily reflected positive contributions from private inventory investment, PCE, nonresidential fixed investment, exports, residential fixed investment, and state and local government spending that were partly offset by a negative contribution from federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.
80% of the half-point increase from the second to third reading is in personal consumption expenditures (PCE), which went from a 0.96-point contribution to 1.36 points. No other element changed appreciably.
This may be as good as it gets, at least on the consumption side. Here’s why, in four points:
- Current-dollar PCE is up by 2.2 percent from 4Q12 to 3Q13 (from $11.2855 trillion to $11.5377 trillion). Real PCE growth after inflation has been 1.9 percent.
- The International Council of Shopping Centers, which uses an index to present its estimates of spending during the Christmas shopping season, has seen year-over-year increases averaging just 2.0 percent during the past four weeks. (The most recent week trended up from the previous awful week, but still showed only a 2.0 percent change from last year).
- One can infer from the combination of Items 1 and 2 that there has been no (seasonally adjusted) overall increase in PCE during the four weeks ICSC presented. It all took place in the first three quarters.
- If, as would be expected, sellers and producers are eating into their built-up inventories, then actual production of PCE-related items may be on the way to turning in a decrease during the fourth quarter.
A flat fourth quarter, aka a no-growth Obamacare Christmas, remains a distinct possibility.