Inventory Adjustment spurs positive revision in U.S. GDP

US GDP overtook the estimates to grow at 2.1% rate annualized, the economy grew in a speedier rate than predicted in the third quarter of this year. Big reduction in the inventory accumulation to a smaller -.60 from -1.40 led to this upward revision.

"This GDP report revealed that the U.S. consumer continues to drive growth due to low energy prices and solid job security, U.S. household consumption expanded at a 3 percent pace, and disposable personal income grew at a 3.9 percent pace", says Voya Global Perspectives in a research note. 

However, the company inventories rose relative to the sales due to weak demand and USD strength. These heightened inventory levels suggest that the production and order need to slow for next year, which is going to weigh on fourth quarter.

The report also focused the corporate profits which dropped 1.1% in third quarter, led by 3.5% gains in previous quarter. This set a recent low earnings 4.7% down yoy.