Friday, November 23, 2012

Q3 GDP: Here come the upward revisions

by Bill McBride on 11/23/2012 11:55:00 AM

Next Thursday, the BEA will release the second estimate of Q3 GDP. The consensus is GDP will be revised up to 2.8% annualized growth, from the advance estimate of 2.0%.  This would be a pretty sharp upward revision.

As an example, from Nomura analysts today:

"We believe real GDP growth will be revised significantly upward to an annualized pace of 3.0% versus the originally reported 2.0%, supported by greater inventory building and better net trade statistics than previously estimated."
It is important to remember that the "advance" estimate is based on incomplete source data, or data subject to revisions. It appears the missing data (mostly for September) was better than expected, and that revisions have been favorable for GDP. I'll post some more Q3 estimates later.

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