Economy

Q3 GDP Revised Higher, with Caveats

The Commerce Department is out with its first revision on third-quarter gross domestic product. GDP growth was initially said to be 2.0%, up from 1.3% in the second quarter. Final demand was what offered the boost. The revised figure was…

By Jon C. Ogg
Published November 29, 2012, 8:49am ET · 1 min read

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The Commerce Department is out with its first revision on third-quarter gross domestic product. GDP growth was initially said to be 2.0%, up from 1.3% in the second quarter. Final demand was what offered the boost. The revised figure was adjusted higher as expected to a new rate of 2.7%. The issue is that the revision was not quite as much as expected, as Dow Jones and Bloomberg were both calling for 2.8%.

Stronger inventories and exports added the boost along with final demand from consumers. If you look at corporate profits in the measurement, this rose by over 18% if you adjust for after-taxes and for inventories and capital consumption. The change in private inventories added 0.77 of a percentage point to growth. Exports were revised to +1.1% from -1.6%. Business spending was negative. The PCE Price Index rose by 1.6% in the quarter.

With unemployment still close to 8.0%, today’s GDP gains may feel a bit empty, even if this was the best GDP gain since late 2009. Again, this is a revision number.

JON C. OGG

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Jon C. Ogg

Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.

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