24/7 Wall St.

Friday morning will bring the first look at third-quarter gross domestic product (GDP) for the United States. Note that the prior five GDP reports have been weak and signaling a very lackluster recovery, despite not having been recessionary.

It was just in September that the Federal Reserve officially projected that GDP growth would remain muted, perhaps for years. Still, the more recent GDPNow model forecast from the Atlanta Federal Reserve Bank was for real seasonally adjusted GDP growth to be 2.1% in the third quarter of 2016, up from the prior 2.0% estimate just a week earlier. The most fresh look on durable goods was weak for September, but the August revisions seem to make an all-in barely net-positive for GDP.

The preliminary estimates from each of the major news agencies this week were seen as follows:

• Bloomberg sees 2.5% GDP and 1.5% on the price index.
• Thomson Reuters sees 2.5% GDP and 1.4% on the price index.
• Dow Jones (WSJ) sees 2.5% GDP and 1.3% on the price index.

24/7 Wall St. wanted to take a look to see what outside sources were projecting for GDP as well.

PNC Financial’s Stuart Hoffman and Gus Faucher gave their views on the first look at third-quarter GDP. The advance report is projected to be 2.5% growth and the price index is projected to be up 1.6%. Their combined commentary for each headline report said:

Growth rebounded in the third quarter after softness in the first half of the year.  One contributor was a turnaround in the investment in inventories. … With energy prices moving higher in recent months and wages rising, inflationary pressures are gradually building.

PNC Financial said of the second-quarter report, which is now of course old data:

Growth in real gross domestic product in the second quarter was revised down slightly in the second estimate, to 1.1 percent at an annual rate, from 1.2 percent in the advance estimate. The small downward revision to GDP came from downward revisions to state and local government spending and private inventories, and an upward revision to imports (higher imports reduce GDP). These were somewhat offset by upward revisions to business fixed investment and consumer spending.

Stifel’s Lindsey Piegza said that new home sales picked up markedly at the end of the third quarter. This was in part due to surging demand in the Northeast. Her view is that this housing data is expected to be a minimal contribution to topline growth in Friday’s GDP report, even if residential investment remains a silver lining amid an otherwise lackluster recovery.

Each new report on GDP matters. The GDP is effectively the total production value of the nation each quarter. It is made up of the purchases of domestically produced goods and services, and that applies to purchases made by individuals, businesses, government and even foreign buyers.

GDP will be released at 8:30 a.m. Eastern Time on Friday, October 28. You can bet that the politicians and those seeking to be elected will be tearing these numbers apart to support which views they have on the economy.