Recent Updates

  • Turkey: Nondomestic PPI (Oct); Kuwait: CPI (Oct), Financial Soundness Indicators (Q2); Israel: Inflation Expectation (Nov)
  • Brazil: Economic Activity (Sep); Chile: BOP, GDP (Q3)
  • Cyprus: Industrial Turnover (Aug); Greece: Merchant Fleet Statistics, BOP (Sep)
  • Iceland: Building Cost Index (Dec)
  • Estonia: Export/Import Prices, PPI (Oct); Georgia: PPI, Foreign Trade, Money Supply (Oct); Armenia: PPI Press, Nominal Wages Press (Oct); Romania: IP, Labor Productivity, Industrial
  • more updates...

Economy in Brief

U.S. GDP Growth Remains Firm in Q3, Despite Storm Effects
by Tom Moeller  October 27, 2017

Economic growth of 3.0% (2.3% y/y) during Q3'17 roughly matched growth during Q2. Together, these were the firmest quarters since the middle of 2014. The latest figure surpassed expectations for a 2.6% rise in the Action Economics Forecast Survey. The Commerce Department indicated that Hurricane Harvey reduced oil & gas output, while Hurricane Irma lessened agriculture production.

The change in business inventories added 0.7 percentage points to growth last quarter following a one-tenth of a percentage point Q2 addition. Improvement in net exports added a 0.4 percentage point to growth, the most in a year. Exports grew 2.3% (2.3% y/y), the weakest advance in three quarters. Imports fell 0.8% (+3.2% y/y), the first decline since Q1'16.

Domestic final sales growth of 1.8% (2.3% y/y) was the weakest advance since Q1'16 as it decelerated from 2.7% in Q2. Consumer spending growth slowed to 2.4% (2.6% y/y) from 3.3% as nondurable goods consumption halved to 2.1% (2.5% y/y). Gasoline & fuel oil consumption declined 4.8% (-1.3% y/y) while clothing purchases fell 0.5% (+1.6% y/y. Durable goods consumption growth quickened to 8.3% (6.2% y/y) as motor vehicle buying strengthened 14.7% (4.3% y/y). Spending on home furnishings and appliances advanced 7.4% (6.6% y/y), but recreational goods purchases eased 0.2% (+8.5 y/y) following three straight quarters of double-digit growth. Services spending grew 1.5% (2.1% y/y), the weakest quarterly gain in four years. Housing utilities spending gained 0.2% (0.6% y/y) after a 3.4% rise. Recreation spending strengthened 3.7% (3.0% y/y) while restaurant & hotel expenditures rose 2.8% (1.2% y/y).

Business fixed investment grew 3.9% (4.4% y/y). Three-quarter growth averaging 5.9% was the quickest in three years and up from a 0.6% decline last year. Equipment spending grew a steady 8.6% (5.9% y/y) as investment in information processing equipment jumped 12.9% (8.6% y/y). Industrial equipment investment grew 5.6% (7.6% y/y) and intellectual property product investment improved 4.3% (3.3% y/y). Structures investment fell 5.2% (+3.3% y/y) after a 7.0% rise.

Residential investment fell 6.0% following a 7.3% decline. Year-to-year growth of 0.9% was down from the peak 13.5% advance during all of 2012.

Government sector spending eased 0.1% (-0.2% y/y), off for the third straight quarter. State & local government spending fell 0.9% (-0.3% y/y) following a 1.5% decline. Federal government investment increased 1.2% after a 1.9% Q2 gain, but it was unchanged y/y. Defense spending grew 2.3% (0.1% y/y) after a 4.7% rise. Nondefense spending eased 0.5% (-0.0% y/y), off for the third straight quarter.

The GDP price index strengthened 2.2% (1.8% y/y), the quickest increase in five quarters. The gain was led by a 5.1% increase (4.0% y/y) in the residential investment price index. The government consumption price index rose 2.5% both q/q and y/y. The personal consumption price index gained 1.5% (1.5% y/y), up from the 0.3% Q2 increase and the business fixed investment price index rose 1.3% (1.3% y/y).

The GDP figures can be found in Haver's USECON and USNA database. USNA contains virtually all of the Bureau of Economic Analysis' detail in the national accounts, including the integrated economic accounts and the recently added GDP data for U.S. Territories. The Action Economics consensus estimates can be found in AS1REPNA.

Chained 2009 $ (%, AR) Q3'17 (Advance Estimate) Q2'17 Q1'17 Q3'17 Y/Y 2016 2015 2014
Gross Domestic Product 3.0 3.1 1.2 2.3 1.5 2.9 2.6
  Inventory Effect 0.7 0.12 -1.5 0.1 -0.4 0.3 -0.1
Final Sales 2.26 2.95 2.7 2.2 1.9 2.6 2.7
  Foreign Trade Effect 0.4 0.2 0.2 -0.1 -0.2 -0.7 0.0
Domestic Final Sales 1.8 2.7 2.4 2.3 2.1 3.3 2.7
Demand Components
  Personal Consumption Expenditures 2.4 3.3 1.9 2.6 2.7 3.6 2.9
  Business Fixed Investment 3.9 6.7 7.1 4.4 -0.6 2.3 6.9
  Residential Investment -6.0 -7.3 11.1 0.9 5.5 10.2 3.5
  Government Spending -0.1 -0.2 -0.6 -0.2 0.8 1.4 -0.6
Chain-Type Price Index
  GDP    2.2 1.0 2.0 1.8 1.3 1.1 1.8
   Personal Consumption Expenditures 1.5 0.3 2.2 1.5 1.2 0.3 1.5
     Less Food/Energy 1.3 0.9 1.8 1.3 1.8 1.3 1.6
close
large image