MNI DATA IMPACT: US Q2 GDP Rev Down To +2.0%

--Downward Revision For Net Exports, Inventories 

--Core PCE, Government Spending Revised Down From Advance Estimate 

--Initial Jobless Claims Up 4k to 215k in Aug 24 Wk

     WASHINGTON (MNI) - Second quarter GDP was revised down to a 2.0% pace of

growth from the 2.1% advance estimate, as expected by MNI and Bloomberg surveys.

     Also released at the same time, initial claims increased by 4,000 to

215,000 in the August 24 week, also in line with the expectations of Bloomberg

and MNI.

     Here are some of the key takeaways from the data released on Thursday:

     - The GDP price index was unchanged at 2.4%, while the core PCE price index

was revised down slightly to a 1.7% reading from 1.8% in the advance estimate.

The year/year rate for the core PCE measure was revised down to 1.5% from 1.9%

in the advance estimate.

     - The key factors in the downward adjustment were a wider net export gap

and a downward revision to private inventory growth. Residential investment was

also revised down to -2.9% from -1.5% in the advanced estimate, while

nonresidential fixed investment remained unchanged at -0.6%.

     - There was an offsetting upward revision to PCE, which MNI had anticipated

due to strong retail sales and services spending data. Government spending was

revised down to 4.5% from 5.9% in the advance estimate.

     - Final sales to domestic purchasers were revised up to a 3.6% pace from

the 3.5% rate in the advance estimate, up significantly from the 1.8% pace set

in the first quarter of 2019.

     - The initial claims data reflect a 4,245 increase in unadjusted claims,

when seasonal factors had expected a 1,266 increase in the current week. The

largest unadjusted gain was in New York (+4,564), while large declines were seen

in Maryland (-383) and California (-432).

     - The four-week moving average for claims fell marginally by 500 to 214,500

in the August 24 week and would be hold relatively steady next week as the

212,000 level in the August 3 week rolls out.

     - Continuing claims increased by 22,000 to 1.698 million in the August 17

employment survey week, but the four-week average held relatively steady,

decreasing by 250 to 1.697 million.

     Link to breakdown of 2nd read vs first estimate:

https://apps.bea.gov/national/pdf/revision_information/Rev1_2q19_2nd.pdf

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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