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US GDP advance estimate for Q3 2018

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trump digging foxcoon american flagEvan
Vucci/AP

The Commerce Department is set to release its first reading on
how the US economy performed in the third quarter at 8:30 a.m.
ET. 

Economists forecast that gross domestic
product
, the value of every good and service produced within
the country, increased at an annualized rate of 3.3%, according
to estimates compiled by Bloomberg. 

A healthy jobs market with the lowest unemployment rate in 49
years, coupled with strong consumer confidence, likely supported
consumer spending, the biggest driver of the US economy.

While consumer spending continues to be robust, business
investment appears to have stalled in the July-September period
according to economists at Morgan Stanley. They estimate a 0.1
percentage-point boost to GDP from corporate America, down from
1.2 percentage points in the second quarter. 

Another likely area of weakness is
housing
; much of the data on residential investment during
the third quarter was weaker than expected. Existing-home sales
peaked in November and fell every month in Q3 amid affordability
constraints and tight inventory. But because housing contributes
little to overall GDP, it should only have a modest drag on
growth, the economists said. 

A component that could be a significant drag, however, is net
exports. Companies outside the US stockpiled on goods ahead of
the implementation of tariffs, providing a more than
one-percentage-point boost to GDP in Q2. But this effect faded in
Q3; in August, for example, the
US goods deficit with China
 jumped to an all-time
one-month record of $38.6 billion without seasonal
adjustments. 
 

“Inventories should see the opposite effect, where we expect a
significant 2.4 percentage-point contribution after the 1.2pp
drag from this volatile category in 2Q,” Morgan Stanley’s
economists said in a preview. 


More to come, refresh this page for the latest at 8:30 a.m.
ET. 

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