MNI DATA ANALYSIS: US Q3 GDP Revised Unrev At +3.5%>

--PCE Growth Rev Down To +3.6%; Nonresidential Fixed Invest Rev Up 

--Core PCE Price Index Revised Down To +1.5%; Y/Y Unrev At +2.0%

By Kevin Kastner, Harrison Clarke, and Shikha Dave

     WASHINGTON (MNI) - Third quarter GDP growth was unrevised at a 3.5% 

annual rate, compared with expectations for a small upward revision to 

3.6%, data released Wednesday by the Bureau of Economic Analysis showed. 

     There was larger upward revisions to nonresidential fixed 

investment, residential investment, and inventories growth that were 

offset by slower PCE and government spending growth and a wider net 

export gap. 

--OVERALL GROWTH UNREVISED

     Overall, the data suggest little change in the overall growth 

picture, and the mix of revisions resulted in a small downward 

adjustment to final sales. The price picture was little changed from the 

advance estimate. 

     Nonresidential fixed investment was revised upward to a 2.5% pace 

from the 0.8% gain in the advance estimate. Structures are now a much 

smaller drag than previously reported, now down 1.7% vs down 7.9% in the 

advance report. Equipment growth was revised higher while intellectual 

property growth revised lower. 

     Inventory investment was revised up to a $86.6 billion gain for the 

quarter from a $76.3 billion rebound in the advance estimate. The net 

export gap now stands at $945.8 billion, wider than $939.0 billion gap 

in the advance estimate. 

     Personal consumption was revised down to a still-strong 3.6% pace 

for the quarter from the 4.0% advance estimate. There were downward 

revisions to both goods and services PCE. 

     The personal savings rate was revised down slightly to 6.3% from 

the 6.4% level in the advance estimate. It was 6.7% in the previous 

quarter. 

     Government spending was revised downward to a 2.6% gain, compared 

with a 3.3% rise in the advance estimate. 

     Residential fixed investment was revised upwards to a 2.6% decline 

from the 4.0% drop in the advance estimate. 

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

product were revised down to a 1.2% gain from the 1.4% increase in the 

advance estimate. Real final sales to domestic purchasers was unrevised 

from the 3.1% rise in the advance estimate. 

     The first estimate of the alternative growth measure, real Gross 

Domestic Income, was up 4.0% after a 0.9% gain in the second quarter, 

showing acceleration as opposed to the deceleration from the second 

quarter seen for overall GDP. The average of GDP and GDI was a 3.8% gain 

for the third quarter, up from 2.5% in the previous quarter. 

--PRICE MEASURES LITTLE CHANGED

     The key price measures were generally unrevised in the third 

estimate for the quarter. The chain price index was unrevised from 1.7% 

gain in the advance report, below the 3.0% gain in the second quarter. 

     The closely watched core PCE price index was revised down slightly 

to 1.5% from the 1.6% gain in the advance estimate, down from 2.1% in 

the previous quarter. As a result, the year/year rate was unrevised from 

2.0% in the advance estimate and still slightly ahead of the 1.9% rise 

in the second quarter. 

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

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