Economic Reports 10/27/06
1st Estimate Q3 GDP +1.6% vs prior 2.6% Full Report
Inside the number: Good news, in nominal terms, GDP increased 3.4% to an annualized $13.3 trillion.
More good news? Some decleration of energy based inflation showed in the PCE deflator annual rate +2.5% vs prior +4%, also core PCE deflator rate +2.3% vs prior +2.7%.
Bad news, the largest YOY PCE price index increase in 11 years. YOY PCE +2.4% vs prior +2.2%, the largest increase since Q2 1995.
Worse news, the largest pullback in housing investment in over 15 years. Investments in housing fell 17.4%, the largest decline since Q1 1991. The shrinking housing sector subtracted 1.1% from Q3 growth.
Silver lining?? The worsening trade balance subtracted 0.6% from growth. Thin, yet building inventories subtracted only 0.1% from growth.
Corporate reinvestment?? Business investment +8.6% vs prior +4.4%. Investments in equipment and software +6.4% vs prior -1.4%. Thus, ex inventories and trade, gross domestic purchases +2.1% vs prior +2%.
Something nasty in the woodshed?? There was little evidence of the soon to be emasculated auto sector in the report. Motor vehicle output +0.7% and consumer spending on cars +0.4%.
Caveats and fine print: This 1st estimate of GDP is based on estimates of several key components, rather than on hard data.
The October data on trade, inventories and construction spending are not yet available. The government will issue its 2nd estimate on Nov. 29
Inside the number: Good news, in nominal terms, GDP increased 3.4% to an annualized $13.3 trillion.
More good news? Some decleration of energy based inflation showed in the PCE deflator annual rate +2.5% vs prior +4%, also core PCE deflator rate +2.3% vs prior +2.7%.
Bad news, the largest YOY PCE price index increase in 11 years. YOY PCE +2.4% vs prior +2.2%, the largest increase since Q2 1995.
Worse news, the largest pullback in housing investment in over 15 years. Investments in housing fell 17.4%, the largest decline since Q1 1991. The shrinking housing sector subtracted 1.1% from Q3 growth.
Silver lining?? The worsening trade balance subtracted 0.6% from growth. Thin, yet building inventories subtracted only 0.1% from growth.
Corporate reinvestment?? Business investment +8.6% vs prior +4.4%. Investments in equipment and software +6.4% vs prior -1.4%. Thus, ex inventories and trade, gross domestic purchases +2.1% vs prior +2%.
Something nasty in the woodshed?? There was little evidence of the soon to be emasculated auto sector in the report. Motor vehicle output +0.7% and consumer spending on cars +0.4%.
Caveats and fine print: This 1st estimate of GDP is based on estimates of several key components, rather than on hard data.
The October data on trade, inventories and construction spending are not yet available. The government will issue its 2nd estimate on Nov. 29
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