U.S. Q3 economic growth unrevised in second estimate
The U.S. economic growth recovered in the third quarter, as shown in the second estimate of GDP. The second estimate was kept unrevised at 33.1 percent quarter-on-quarter.
Delving into details, some upward and downward revisions to GDP components were seen in the second estimate. Consumer spending’s recovery was downwardly revised a bit to 40.6 percent from the initial estimate of 40.7 percent. Government spending was also revised down a bit to -4.9 percent from the initial estimate of -4.5 percent. Meanwhile, imports were upwardly revised to 93.1 percent from the previous estimate of 91.1 percent.
Those downward revisions were countered by upward revisions to non-residential fixed investment, which was upwardly revised to 21.8 percent from the initial estimate of 20.3 percent. Residential investment and exports were revised up as well to 62.3 percent and 60.5 percent, respectively.
Corporate profits rose 27.1 percent, stimulated by receipts from the Paycheck Protection Program (PPP). The BEA noted that subsides to corporate businesses as part of the PPP program in the third quarter.
“The U.S. economy is facing a bumpy road ahead. In the near-term, the current surge in infections is likely to see growth momentum stall as we head to the end of the year. However, positive results from vaccine trials and optimism on a rapid vaccination roll out, is likely to see growth bounce back more quickly come spring”, stated TD Economics in a research report.