US Q3 advance GDP 3.0% vs +2.6% expected

The first look at third quarter 2017 US growth

  • Estimates ranged from +1.8% to +3.6%
  • Q2 reading was +3.1%
  • Personal consumption +2.4% vs +2.1% expected
  • Prior personal consumption +3.3%
  • GDP price index +2.2% vs +1.7% exp
  • GDP deflator +2.1% vs +1.8% exp
  • Core PCE +1.3% vs +1.3% exp

That’s very strong nominal growth because of the bump in the price index. That’s a screaming incentive for the Fed to hike rates in December and to keep the ‘gradual’ pace going in March, maybe more if Taylor gets the top job.


  • Final sales +2.3% vs +2.6% exp
  • Consumer spending on durables +8.3%
  • Business investment +3.9%
  • Investment in equipment +8.6%
  • Investment in IP +4.3%
  • Home investment -6.0%
  • Business investment in structures -5.2%
  • GDP ex motor vehicles +3.5%
  • Inventories add 0.73 pp to GDP
  • The Commerce Dept said it could estimate the overall impact of the hurricanes

The inventory number will unwind in the future so that’s a bit of negative news but housing investment is the flipside. It’s been weak for two quarters but with house prices strong, it won’t stay weak, so that should be a tailwind in Q4 and beyond.

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