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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$] 

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