The U.S. Q3 GDP growth boost to 3.2%
The U.S. Q3 GDP growth boost to 3.2% from 2.9% beat estimates thanks to a big service-led boost to consumption and a smaller than expected $5.1 B downward inventory bump that was partly offset by unexpected downward revisions in equipment and intellectual property. Analysts otherwise saw the expected $1.9 B boost in net exports and upward revisions in construction, leaving a Q3 hike in final sales growth to 2.7% from 2.3%. Analysts left our Q4 GDP growth estimate at 1.8%. The downwardly-revised Q3 inventory bounce leaves a modest upturn after the massive GDP inventory downswing that left an enormous $123.9 B inventory plunge from a lofty $114.4 B accumulation rate in Q1 of 2015 to a $9.5 B liquidation rate in Q2. Beyond inventories, the Q3 data depict a quarter mostly lifted by a big export surge that reversed winter weakness. Analysts saw firm real consumption growth but tiny gains for business fixed investment and government purchases, while residential construction posted a second consecutive quarterly drop before a likely weather-led Q4-Q1 bounce.