United States: Third quarter growth revised down on lower inventories
November 22, 2011
In the third quarter, GDP grew at a seasonally-adjusted annualised rate (saar) of 2.0% over the previous quarter, according to revised data released by the Bureau of Economic Analysis (BEA) on 22 November. The print marked a downward revision compared to the advance estimate of 2.5% published on 27 October and surprised the market on the downside, as analysts expected third quarter GDP to remain unchanged over the October estimate. That said, despite the downward revision, the reading still represents an improvement over the previous quarter's 1.3% expansion. The deterioration over the advance estimate mainly reflected a decline in private inventories, which according to the BEA, subtracted 1.6 percentage points from the growth in the third quarter (advance estimate: -1.0 percentage points) following a negative contribution of 0.3 percentage points in the second quarter. In addition, fixed investment was revised down to a 12.3% expansion (advance estimate: +13.7% quarter-on-quarter saar) on the back slower non-residential fixed investment, which grew a still solid 14.8% (advance estimate: +16.3% qoq saar). Private consumption was revised down a notch to 2.3% (advance estimate: +2.4% qoq saar). On the external front, export growth was revised up to 4.3% (advance estimate: +4.0% qoq saar), while imports recorded a paltry 0.5% increase in the third quarter (advance estimate: +1.9% qoq saar). As a result, the net contribution from the external sector to growth improved to 0.5 percentage points (advance estimate: +0.2 percentage points).