MNI DATA ANALYSIS: US Q3 GDP Revised Down To +3.4% From +3.5%>

--Durable Goods New Orders +0.8% vs Flat Expected

By Kevin Kastner, Harrison Clarke, and Shikha Dave

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

3.4% gain from the 3.5% gain in the previous estimate, data released 

Friday by the Bureau of Economic Analysis showed. 

     At the same time, the price picture was revised only modestly from 

the previous estimate. The core PCE price index was revised up to 1.6% 

from 1.5%, but the year/year rate is still at 2.0%, up from 1.9% in 

the previous quarter. 

     The slight downward revision to GDP was driven by downward 

revisions to residential investment and PCE, as well as a slightly wider 

net export gap, but was partially offset by an upward revision in 

private inventory investment. 

--PCE GROWTH REVISED DOWN SLIGHTLY

     PCE growth was revised down to a 3.5% pace from 3.6% in the 

previous estimate, while the net export gap now stands at $949.7 

billion, wider than $945.8 billion gap in the previous estimate. 

     Nonresidential fixed investment was unrevised from the 2.5% gain in 

the previous estimate, but inventory investment was revised up to a 

$89.8 billion gain for the quarter from an $86.6 billion rise in the 

previous estimate. 

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

product were revised down to a 1.0% gain from the 1.2% increase in the 

previous estimate. Real final sales to domestic purchasers was revised 

down to 2.9% from the previous 3.1% rise.

     Real Gross Domestic Income was revised up to 4.3% from 4.0% in 

the previous estimate and was up from a 0.9% gain in the second 

quarter. The average of GDP and GDI now stands at a 3.8% gain for the 

third quarter, unrevised from the previous estimate and 2.5% in the 

second quarter.

--DURABLE GOODS ORDERS UP

     Also released Friday, durable goods new orders rose 0.8% in 

November, compared with the flat reading expected on a rise in 

transportation orders. Outside of transportation, new orders were down 

0.3%, well below the 0.4% gain expected. 

     Transportation orders rose 2.9%, with nondefense aircraft orders 

up 6.7% and defense aircraft orders up 31.5%. Motor vehicle orders 

were down 0.2%, but the unpublished transportation components rose by 

3.7% in the month. 

     Durable goods inventories were up 0.3%, while shipments rose 0.7% 

and unfilled orders fell 0.1%. Nondefense capital goods shipments rose 

2.4% and were down 0.1% excluding aircraft. 

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

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