MNI DATA ANALYSIS: US 3Q GDP Revised Down To +3.2%>

--Downward Adjustments To PCE, Inventories; Government Spending Rev Up

--Core PCE Price Index Revised Down To +1.3%; Y/Y Unrev At +1.4% 

--Initial Jobless Claims Rose 20,000 To 245,000 In Dec 16 Week

By Kevin Kastner, Sara Haire and Holly Stokes

     WASHINGTON (MNI) - Third quarter GDP growth was revised down to a 

3.2% annual rate from the 3.3% pace in the second estimate, compared 

to no revision expected, but not altering the picture of strong growth 

in most recent two quarters, data released Thursday by the Bureau of 

Economic Analysis showed. 

     Overall, the data suggest that economic growth remained solid, with 

gains over 3.0% in each of the last two quarters after the usual lull in 

the first quarter. GDP appears on track to improve in 2017 from the 1.8% 

rise in 2016, barring a very soft reading in the fourth quarter. 

--GDI REVISED DOWN

     Third quarter Gross Domestic Income revised down sharply to a 2.0% 

gain from the 2.5% increase in the first estimate for the quarter. This 

puts the GDP/GDI average at a 2.6% gain for the third quarter, smaller 

than the 2.9% increase originally posted for the quarter. 

     Both GDI and the GDP/GDI average were below their pace in the 

second quarter, putting them at odds with the small acceleration that 

GDP saw from the second quarter. 

--COMPONENT REVISIONS MIXED

     Within consumption, which is now reported up 2.2% for the quarter 

compared with the 2.3% second estimate, there was a strong downward 

revision to services spending that offset an upward revision to goods 

spending.

     Inventory investment was revised down to a $38.5 billion gain for 

the quarter from $39.0 billion in the second estimate. The net export 

gap now stands at $597.5 billion, wider than $594.4 billion in the 

second estimate. 

     Government spending now stands up 0.7% in third estimate after 

rising 0.4% in the second estimate, with the upward adjustment found in 

the state and local category. 

     Residential fixed investment was revised up to 4.7% rate of 

decline from the 5.1% rate of decline in the second estimate. 

     Nonresidential fixed investment was unrevised at a 4.7% pace of 

growth, with downward adjustments to structures and intellectual 

property offset by a sharp upward adjustment to equipment. 

     As a result of the mix of revisions, real final sales were revised 

down slightly to a 2.4% gain from the 2.5% increase in the second 

estimate. 

--PRICE MEASURES GENERALLY UNREVISED

     The key price measures were little altered. The chain price index 

was unrevised at a 2.1% gain, remaining well ahead of the 1.0% increase 

in the second quarter. 

     The closely watched core PCE price index was revised down slightly 

to a 1.3% pace from the 1.4% gain in the second estimate. However, the 

year/year rate for the measure was unrevised at 1.4%, down slightly from 

1.5% in the second quarter. 

--CLAIMS DATA JUMP

     Also released on Thursday, initial jobless claims rose by 20,000 to 

245,000 in the December 16 employment survey week, only slightly higher 

than the 240,000 level in the November 18 employment survey week. 

     Because claims become volatile during the holidays, the four-week 

moving average is a better indicator. The moving average rose by 1,250 

to 236,000 in the December 16 week, and could rise further in next 

week's data as the 238,000 level in the November 25 week rolls out of 

the equation. 

     Continuing claims rose 43,000 to 1.932 million in the December 9 

week, partially recovering the declines seen in the previous two weeks.

     ** MNI Washington Bureau: Tel. (202)371-2121 ** 

[TOPICS: MAUDS$,M$U$$$,MT$$$$,MAUDR$]