–Private Consumption/Fixed Investment Upgraded 0.2 Pt to +2.3%
WASHINGTON (MaceNews) – The final revision of third-quarter U.S. GDP published Friday, unchanged at 2.1%, upgraded the key consumption component,
The final tally showed upward revisions to Personal Consumption Expenditures, the spending measure key to an economy dominated by consumption, and nonresidential fixed investment that were offset by a downward revision to private inventory investment.
The Bureau of Economic Analysis explained the latest changes in its technical note that follows:
Sources of Revision to Real GDP
Real GDP increased 2.1 percent (annual rate) in the third quarter of 2019, the same as in the “second” estimate. The updated estimates reflected upward revisions to consumer spending and nonresidential fixed investment that were offset by a downward revision to private inventory investment.
• Within consumer spending, an upward revision to services was partly offset by a downward revision to goods. Within services, the largest contributors to the upward revision were “other services” (notably personal care) and financial services (notably portfolio management and investment advice) based on new third-quarter Census Bureau Quarterly Services Report data. Within goods, the largest contributor to the downward revision was food and beverages based on revised Census Monthly Retail Sales Report data.
• Within nonresidential fixed investment, the upward revision was more than accounted for by structures, notably power, based on revised Census Value of Construction Put in Place data.
• Within private inventory investment, the largest contributor to the downward revision was wholesale trade industries, notably nondurable goods,based primarily on revised Census Monthly Wholesale Trade Report data. Real final sales to private domestic purchasers, which measures private demand in the domestic economy and is derived as the sum of consumer spending and private fixed investment, increased 2.3 percent in the third quarter, an upward revision of 0.2 percentage point.
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Third Revision Adds Third Quarter Corporate Profits
Profits from current production (corporate profits with inventory valuation and capital consumption adjustments) decreased $4.7billion in the third quarter, in contrast to an increase of $75.8 billion in the second quarter.
Profits of domestic financial corporations decreased $4.7billion in the third quarter, in contrast to an increase of $2.5 billion in the second quarter.
Profits of domestic nonfinancial corporations decreased $5.5billion, in contrast to an increase of $34.7 billion. Rest-of-the-world profits increased $5.5billion, compared with an increase of $38.7 billion. In the third quarter, receipts decreased $10.0 billion, and payments decreased $15.5billion