Third-Quarter GDP Could Get a Late Boost From Higher Inventories – Real Time Economics

The U.S. economy may have posted even stronger growth last quarter thanks to higher-than-expected growth in business stockpiles.

The U.S. economy may have posted even stronger growth last quarter thanks to higher-than-expected growth in business stockpiles.
Getty Images

Wholesale inventories rose a seasonally adjusted 0.4% in October from the prior month, the Commerce Department said Tuesday. Economists surveyed by The Wall Street Journal had predicted a 0.3% gain.

September inventories also were revised up by $887 million from an initial estimate, which could boost growth estimates for the third quarter.

The Commerce Department last month said output expanded at a 3.9% seasonally adjusted annual rate in July through September, up from an initial estimate of 3.5% growth. One big factor in the upgrade was a smaller drag from inventories.

The agency will release its third estimate of GDP growth in the third quarter on Dec. 23, incorporating new and revised data including the latest inventory figures.

Macroeconomic Advisers raised its estimate for third-quarter GDP growth to 4.2% from 4.1% following Tuesday’s report. J.P. Morgan Chase bumped up its estimate to 4.3% from 4.2%. Barclays left unchanged its estimate of 4.1% growth for the third quarter, but boosted its estimate for the fourth quarter to 2.5% from 2.3%.

But J.P. Morgan Chase economist Daniel Silver warned in a note to clients that “a larger inventory accumulation in the third quarter is a negative development for GDP growth in the fourth quarter, adding a touch more to the already sizable downside risk to our forecast for 2.5%” growth in the final three months of the year.

Another wild card for third-quarter GDP is the Quarterly Services Survey, which the Commerce Department will release Wednesday. The report tracks revenue at service-providing firms, and in the past had led to significant revisions for estimates of consumer spending on health care and other services.

 


 


for economic news and analysis

for central banking news and analysis


Get WSJ economic analysis delivered to your inbox:


Sign up for the WSJ’s Grand Central, a daily report on global central banking


Sign up for the Real Time Economics daily summary

If the article suppose to have a video or a photo gallery and it does not appear on your screen, please Click Here

9 December 2014 | 4:48 pm – Source: blogs.wsj.com

[ad_2]

Leave a Reply

Your email address will not be published.