MNI DATA ANALYSIS: US Q2 GDP Unrevised At +4.2%>

--Durable Goods New Orders +4.5% vs +2.6% Expected

--Initial Jobless Claims +12k to 214k, Showing Little Hurricane Impact

By Kevin Kastner, Harrison Clarke, and Shikha Dave

     WASHINGTON (MNI) - Second quarter GDP growth was unrevised from the 

4.2% pace in the second estimate, as expected, data released Thursday by 

the Bureau of Economic Analysis showed. 

     Likewise, the price picture was revised only modestly from the 

second estimate. The core PCE price index was revised up to 2.1% 

from 2.0%, but the year/year rate is still at 1.9%, up from 1.7% in 

the first quarter. 

     There were upward revisions to most of the major components, offset 

by a large downward adjustment to the decline in inventory growth.

--PCE GROWTH UNREVISED

     PCE growth was unrevised from 3.8% in the second estimate. The net 

export gap now stands at $841.0 billion, narrower than $843.7 billion 

gap in the second estimate. 

     Nonresidential fixed investment was revised up to a 8.7% pace from 

the 8.5% gain in the second estimate, but inventory investment was 

revised down to a $36.8 billion decline for the quarter from a $26.9 

billion decline in the second estimate. 

     Analysts expect Hurricane Florence to have a negative impact on 

third quarter growth, with a post-hurricane rebound in the fourth 

quarter barring any other major storms.

     As a result of the mix of revisions, real final sales of domestic 

product were revised up to a 5.4% gain from the 5.3% increase in the 

second estimate. Real final sales to domestic purchasers was revised 

up to 4.0% from the 3.9% rise in the second estimate. 

     Real Gross Domestic Income was revised down to 1.6% from 1.8% in 

the previous estimate and was down from a 3.9% gain in the first 

quarter. The average of GDP and GDI now stands at a 2.9% gain for the 

second quarter, down from 3.1% in the previous quarter. 

--DURABLE GOODS ORDERS SURGE

     Also released Thursday, durable goods new orders rose 4.5% in 

August, compared with the 2.6% rise expected due to a surge in 

transportation orders. Outside of transportation, new orders were up 

only 0.1%, below the 0.4% gain expected. 

     Transportation orders increased 13.0%, with nondefense aircraft 

orders up 69.1% and defense aircraft orders up 17.0%. Motor vehicle 

orders were down 1.0%, but the unpublished transportation components 

rose by 39.7% in the month. 

     Durable goods inventories were down 0.4%, while shipments rose 0.8% 

and unfilled orders rose 0.9%. Nondefense capital goods shipments rose 

3.0% and were up only 0.1% excluding aircraft. 

--INITIAL CLAIMS RISE, HURRICANE IMPACT LIGHT

     Initial jobless claims rose by 12,000 to 214,000 in the September 

22 week after hitting a 49-year low in the previous week. The impact of 

Hurricane Florence is beginning to be seen in the data, though it 

appears that much of the effect is still to come.

     The four-week moving average rose by 250 to 206,250 in the 

current week, and is likely to rise further next week when a 205,000 

level in the September 1 week drops out.

     Continuing claims rose by 16,000 to 1.661 million in the September 

15 week, below the 1.710 million rate in the August 18 employment survey 

week. The impact of the hurricane should begin to be seen in this 

data series next week.

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

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