BEA Revises Third Quarter 2019 GDP Growth Upward To 2.13%

In their second estimate of the US GDP for the third quarter of 2019, the Bureau of Economic Analysis (BEA) reported that the US economy was growing at a +2.13% annual rate, up 0.20 percentage points (pp) from their previous estimate and up 0.12pp from the prior quarter.

This report contained no material new information about the economy. All of the increased headline growth came from a revision to the previously reported inventory number, which was revised from a slight contraction (-0.05% growth rate) to mild growth (+0.17% growth rate), adding 0.22pp to the headline. None of the other line items impacted the headline number by more than 0.07pp.

Annualized household disposable income was revised $-102 lower than in the previous report, and the household savings rate was reported to be 7.9%, down -0.2pp from the previous report.

For this estimate the BEA assumed an effective annualized deflator of 1.67%. During the same quarter the inflation recorded by the Bureau of Labor Statistics (BLS) in their CPI-U index was effectively the same at 1.66%. Slightly over estimating inflation results in slightly pessimistic growth rates, and if the BEA's nominal data was deflated using CPI-U inflation information the headline growth number would have been marginally higher at 2.18%.

Among the notable items in the report :

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