MNI DATA IMPACT: US Q3 GDP Beats Expected, Up 1.9%>

--Notable gains in PCE, Government Spending, Imports

--Residential Investment Rebounds 

--Losses anticipated in Nonres Fixed Investment 

By Alexandra Kelley

     WASHINGTON (MNI) - Preliminary third quarter GDP growth came in 

above expectations at a 1.9%, above the 1.6% estimate expected by market 

analysts. The advance GDP Price Index, however, came in slightly lower 

than expected at 1.7% in comparison to market predictions of 1.9%.  

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

Wednesday: 

     - The GDP headline figure is expected to be bolstered by gains in 

government spending at the federal and state/local levels. Expected 

readings are 3.4% and 1.1% respectively. Additionally, personal 

consumption expenditures (PCE) are projected to increase by 2.9%, and 

residential investment is expected to jump to 5.1% for the third quarter 

after a dismal final second quarter figure.

     - After six consecutive quarterly lossess, residential investment 

is expected to jump by 5.1% in Q3. This contributes to private 

domestic investment within the GDP data, giving the headline number a 

major boost. A positive reading for residential investment hasn't been 

seen since Q4 2017, during which the headline GDP rang in at a 3.5% 

high.  

     - The key sector expected to offset positive gains for GDP is 

nonresidential investment, which is predicted to fall by 3.0% in the 

third quarter. This number is seen driven lower largely by decreases in 

nonresidential structures. Nonresidential investment has not fallen this 

low since Q4 2015, which corresponded to a low GDP of just 0.1%. 

     - Despite global trade tensions, imports and exports both saw 

gains resulting in a positive net trade gap. Imports are expected to 

increase by 1.2% as exports are expected to rebound by 0.7%. This will 

mark the first time imports have climbed into positive double-digits 

since the fourth quarter of 2018. 

     - Final sales to domestic purchasers are expected to increase by 

2.0%. While this is slower than the 3.6% jump seen in August, the 

year/year rate is up 2.2%, indicating a steady accelereation. 

     ** MNI Washington Bureau: 202-371-2121 ** 

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