Third Estimate For Q3 GDP At 3.4%

The third estimate for third-quarter GDP, at annualized growth of 3.4 percent vs 3.5 percent in the first two estimates, shows a fraction less strength for consumer spending at 3.5 percent from 3.6 percent, and a bit greater weakness for residential spending at minus 3.6 percent vs minus 2.6 percent. Business investment held steady at a constructive 2.5 percent rate of growth, as did government purchases at 2.6 percent.

Exports, subtracting 0.62 points, pulled down GDP by a little more than the second estimate, while imports rose steeply to pull down GDP by 1.37 percentage points, little changed from the second estimate. Combining the two, the negative contribution from net exports was 1.99 points vs the second estimate's 1.91.

Inventories rose $89.8 billion in the month to contribute slightly more to GDP, at 2.33 percentage points vs 2.27 in the second estimate.

The third quarter was a strong one for the economy, getting a boost from an overdue inventory build but driven once again by the most important factor and that is consumer spending. Whether continued strength for the consumer can be expected in the fourth quarter will get an indication later this morning with the personal income and outlays report for November.