Q3 GDP Revised Lower To 3.4% As Ex-Inventories GDP Rises Just 1.0%

[McRocket]

'With the US economy firing on all four cylinders heading into the 3rd quarter, largely thanks to the latent effects from Trump's fiscal stimulus, the BEA released its final estimate of Q3 GDP which confirmed what we learned first two months ago, and was revised last month, namely that the US economy grew at an annualized rate in the mid-3% range, in line with both expectations and the first estimate released a month ago, although the final estimate showed a modest slowdown to the prior revision, with Q3 GDP now said to have grown 3.4%, below the 3.5% 2nd revision and consensus estimate.

Combined with the 4.2% GDP growth in the second quarter,, the results capped the best back-to-back quarters since 2014. At the same time, growth is projected to moderate significantly this quarter, with estimates now running in the mid to low 2% range. Furthermore, just like last month, a quick look at the internals reveals some ugly details below the surface.

While household spending remained strong, rising 3.5% after 3.8% in Q2, the largest increase since Q4 2014, it shrank from both the first estimate of 4.0%, and the second estimate of 3.6%, and missed expectations of 3.6%, contributing 2.37% of the bottom line 3.360% GDP print (below the 2.45% in the second estimate), the main reason why the US economy grew as fast as it did in the third quarter was a build up in inventories, which contributed even more than was previously estimate, or some 2.33%, or 69% of the bottom line number. This was the biggest quarterly inventory stocking since the last quarter of 2011, and also implies that excluding Inventories, GDP rose a paltry 1.0% in the quarter.'

Q3 GDP Revised Lower To 3.4% As Ex-Inventories GDP Rises Just 1.0%


So, without the massive inventory buildup...the economy stunk in the 3'rd Quarter.

Now why did companies stock up SO hugely?

Probably two reasons; huge optimism (misplaced IMO - as the equity markets are showing) and Trump's tariffs (they want to build inventory before the tariffs kick in - they did not know trump was going to delay the 'trade war' at that time).

 

[depotoo]

Stunk? Lol. No, this stunk-
https://nypost.com/2017/04/01/obama-was-terrible-for-economic-growth/
On Thursday we closed the book on the Obama economic “miracle” — and it’s a miracle we are not in a recession.

Last week the Commerce Department released its third revision for fourth-quarter 2016 gross domestic product. The number came in at a paltry 2.1 percent, meaning that growth during President Obama’s final year in office — the end of an “Error of Hope” — landed with a big thud at just 1.6 percent.

That low-water mark puts the Obama presidency in last place among all the post-World War II presidents when it comes to economic growth.

Obama Only President in History to Never Have 3% Growth | RealClearPolitics!