Home   Logon   Portfolio Managers   Research and Commentary   About Us    Contact Us       Follow Us: 

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Click for Bio
Follow Brian on Twitter Follow Brian on LinkedIn View Videos on YouTube
   Bob Stein
Deputy Chief Economist
Click for Bio
Follow Bob on Twitter Follow Bob on LinkedIn View Videos on YouTube
 
  Real GDP Growth in Q3 Was Revised Up to a 2.3% Annual Rate
Posted Under: Data Watch • GDP • Government • Inflation • Markets • Interest Rates • Spending • Bonds • Stocks • COVID-19
Supporting Image for Blog Post

 
Implications:  Real GDP growth in the third quarter was revised slightly higher, growing at a 2.3% annual rate, although still showing a substantial slowdown from the 6.5% in the first half of the year when the federal government was passing out checks like they were going out of style.  The slight upward revision to the overall number in Q3 was mainly due to an upward revision in consumer spending, specifically in services. Inventories were also revised slightly higher while net exports slightly lower, essentially offsetting each other.  Inventories were the main driver of growth in Q3, contributing 2.2 percentage points, but not because they increased.  Inventories fell in Q3, but they did so much more slowly than they did in Q2, resulting in being additive to real GDP.  (Yes, we know that sounds weird, but that's how the GDP accounting works.)  Consumer spending also rose in Q3, due to non-durables and services, even though spending on autos fell at a 50.3% annual rate.  Today we also got our second look at economy-wide Q3 corporate profits, which were revised lower, but still sit at record highs. Profits rose 3.4% from the second quarter and were up 19.7% from a year ago. Profits rose at both domestic non-financial corporations and domestic financial corporations, and also from operations abroad.  Our capitalized profits model suggests US equities remain cheap, not only at today's interest rates but even using a 10-year Treasury yield of 2.00% . Notably, corporate profits have already made a V-shaped recovery from the plunge last year as the pandemic was first erupting in the US.

Click here for a PDF version
Posted on Wednesday, December 22, 2021 @ 10:45 AM • Post Link Share: 
Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2023 All rights reserved.