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2008 Economic Calendar |
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Resource Center » U.S. & Intl Recaps | Release Dates | Why Investors Care | Today's Calendar
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Gross Domestic Product (GDP) is the broadest measure of aggregate economic activity and encompasses every sector of the economy. Why Investors Care
| Released on 10/28/05 For Q3 Advance 2005 | |||||||||||||||||||||
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Highlights
Third-quarter GDP grew solidly as expected, at an initial estimate of 3.8% vs. a pace of 3.3% in the second quarter. The Commerce Department could not separate any special effects from Katrina and Rita, which it said are embedded in the data.
Note that the importance of the report is weakened a bit by missing data for September, which proved to be a big month. Commerce Department assumptions for September included a widening trade gap, less inventory accumulation, and fewer aircraft shipments tied to the Boeing machinist strike.
Final sales grew at a strong 4.4% pace but behind 5.6% in the second quarter. Net exports added fractionally to growth while inventories cut growth sharply, by nearly 6 tenths. Personal consumption expenditures rose 3.9% vs. 3.4% in the second quarter. Spending on durables jumped 10.8% on strong auto sales, the result of big incentives early in the quarter.
Wages & salaries rose 2.3% year-on-year compared with 2.6% in the second quarter. Personal income in the latest quarter was cut by $40 billion reflecting uninsured hurricane damage.
Core PCE prices were tame, up 1.3% vs. 1.7% in the second quarter. Inflation worries aside, the latest reading is the lowest in more than two years! But the overall rate did jump 5 tenths to 3.1% due to high oil prices.
Bonds dipped and the dollar firmed in immediate reaction to the data. GDP, pending revisions, grew solidly in the third quarter and appears to be growing no less solidly early in the fourth quarter. Rebuilding promises to give a further boost to growth. The price data weren't worrisome and still show that energy pass through has been limited. Still, the 3.1% overall price jump ensures that the Federal Reserve will be keeping their eye on inflation and will keep removing accommodation.
Real GDP expanded at a 3.3 percent rate in the second quarter of 2005. Retail sales moderated significantly in the third quarter, pointing to slower consumer spending. Industrial production also rose more slowly in the July-to-September period, hampered by hurricane activity. Nonetheless, economists are expecting more rapid economic growth for the third quarter than in the previous quarter. The GDP deflator probably accelerated in the third quarter from the second quarter pace due to sharp gains in energy prices.
Real GDP Consensus Forecast for Q3 05: 3.8 percent annual rate
Range: 3.0 to 5.1 percent annual rate
GDP deflator Consensus Forecast for Q3 05: 3.0 percent annual rate
Range: 2.4 to 3.5 percent annual rate
![[Chart]](chart.gif)
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Real GDP growth is always quoted at a quarterly annual rate. It measures how much the economy has grown over a three-month period. Quarterly growth rates are often volatile; consequently, economists also like to look at the year-over-year growth in GDP. The yearly changes tend to be more stable. |
![[Chart]](chart_1.gif)
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It is common to compare quarterly changes at annual rates in the GDP deflator. These can be volatile, just like the quarterly swings in real GDP growth; as a result, the trend in inflation is better determined by year- over- year changes. |
| 2005 Release Schedule | ||||||||||||||||||||||||||
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