Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Bio
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
Bio
X •  LinkedIn
 
  Q3 GDP revised up to 2.6% annual rate
Supporting Image for Blog Post

 
Implications:  Not much "news" in today's report on GDP, showing the economy expanded at a 2.6% annual rate in the third quarter.  This is an upward revision, but not quite as much as the consensus expected.  The (mild) surprise was that consumer spending on services was revised downward, mainly due to health care and financial services/insurance.  We wonder whether higher health care premiums are driving people away from that market.  Regardless, these figures reflect activity ending in September, so are not a reason for concern.  In the past two quarters, real GDP has grown at a tepid 2.1% annual rate.  However, we believe this supposed "soft patch" is largely the result of difficulties the government is having with seasonally-adjusting imported oil prices.  That's why the government says trade has been such a huge drag on real GDP growth in Q2/Q3.  Excluding trade from the GDP numbers gives us the growth rate of domestic purchases, which are up at a very strong 4.7% annual rate.  The oil price issue will now reverse in the current quarter, which is part of the reason we think real GDP will register a 5% annualized growth rate in Q4, the other major reason being that the underlying growth rate of the economy is accelerating, too.  Today's report also confirms that corporate profits continue to grow, but not as quickly as originally estimated.  Profits were revised down 1.1% for Q3 but still climbed at a 6.6% annual rate versus Q2 and are up 26.4% versus a year ago.  This will help boost business investment in the year ahead.

Click here to view the entire report.
Posted on Wednesday, December 22, 2010 @ 10:42 AM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
Search Posts
 PREVIOUS POSTS
Brian debates the debt market on CNBC's Kudlow Report
Greedy Innkeeper or Generous Capitalist?
Elections Have Consequences - II
Housing starts rose 3.9% in October to 555,000 units at an annual rate
Brian discusses the reasons to be optimistic about 2011 on FBN
Industrial Production Increased 0.4% in November
Brian debates the growth outlook and the bond market on CNBC's Kudlow Report
November CPI up 0.1%
Fed Keeps Monetary Spigot Wide Open
Retail sales increase 0.8% in November
Archive
Skip Navigation Links.
Expand 20242024
Expand 20232023
Expand 20222022
Expand 20212021
Expand 20202020
Expand 20192019
Expand 20182018
Expand 20172017
Expand 20162016
Expand 20152015
Expand 20142014
Expand 20132013
Expand 20122012
Expand 20112011
Expand 20102010

Search by Topic
Skip Navigation Links.

 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.