Third Estimate 3rd Quarter GDP Very Solid

The third estimate puts third-quarter GDP at a very solid 3.2 percent annualized rate though the gain isn't based on consumer spending which rose at only a 2.2 percent pace. What held up the quarter was a very solid 4.7 percent showing for nonresidential fixed investment in what was the third straight strong reading for this key measurement of business spending.

Other positives included a constructive build in inventories and a nearly as constructive improvement in net exports as exports rose and imports fell. Government spending was very soft, at a 0.7 percent rate, while residential investment contracted sharply, at 4.7 percent for a second straight sizable decline.

But residential investment looks to rise sharply in the fourth quarter given the enormous gains underway in the new home market while fourth-quarter GDP, perhaps also boosted by acceleration in consumer spending, looks to roughly match the third quarter in what would be the third straight 3 percent quarter for GDP.

Recent History Of This Indicator:
The third estimate for third-quarter GDP is expected to come in at a 3.3 percent annualized rate and unchanged from the second estimate. Consumer spending, also seen unchanged at 2.3 percent, provided some lift but the quarter really depended on an inventory build as well as strength in nonresidential investment and improvement in net exports. The GDP price index is seen unchanged a 2.1 percent rate.