In the US, the revised GDP growth report for the third quarter was released. According to the fresh report, GDP grew at an annualized rate of 2.1% during the third quarter. Analysts at Wells Fargo highlight that growth in real disposable income remains strong, a solid fundamental supporting the economy at present.
Key Quotes:
“Revised data that were released today showed that U.S. real gross domestic product (GDP) grew at an annualized rate of 2.1% in Q3-2019, which was a tad stronger than the 1.9% rate that was originally reported (top chart). Revisions fell largely in the investment component of the GDP accounts.”
“Business fixed investment, which was originally reported to have declined 3.0% during the quarter, was revised to show a drop of 2.7% instead. In addition, there was a bit more inventory investment than reported in the first release.”
“The overall story remains one of some slowing in the overall rate of GDP growth over the past year or so.”
“Income growth generally remained strong across the board in Q3. In nominal terms, wages and salaries grew 3.5% (annualized rate) on a sequential basis in Q3 and at an impressive rate of 4.6% on a year-ago basis. Proprietor’s income jumped 13.2% during the quarter. Taking all the income measures into account and adjusting for inflation shows that real disposable income (i.e., purchasing power) was up at a strong rate of 2.9% on a year-ago basis in the third quarter. Strong growth in real disposable income is a solid underlying economic fundamental that points to continued economic expansion in the foreseeable future.“
Share
