Usually U.S. GDP figures garner a fair amount of attention but the latest set of GDP figures were released by the U.S. Commerce Department with little in the way of commentary. Third quarter 2017 “advance” estimates of U.S. GDP became public on Friday night Australian time. They indicated U.S. GDP grew at annualised rate of 3.0%, well above the median market estimate of 2.6% but just a little short of the second quarter’s 3.1%. Advance estimates are the first of four and they are subject to three more revisions over the next two months.
While the numbers were higher than expected, bond yields fell and the USD weakened against other major currencies. NAB Head of FX Strategy Ray Attrill said the figures were vaguely misleading because of the effect of higher inventories. “Growth was somewhat flattered by a 0.7% contribution from inventories, though personal consumption expenditure grew at [a] 2.4% annualised pace in Q3, a little stronger than the 2.1% expected.”
U.S. GDP numbers are published in a manner which is different to most other countries; quarterly figures are compounded to give an annualised figure. In countries such as Australia and the UK, an annual figure is calculated by taking the latest number and comparing it with a figure from a year ago. The diagram below shows U.S. GDP once it has been expressed in the normal manner.