23 Dec 2014
US Q3 GDP may see an upside revision – Rabobank
FXStreet (Barcelona) - The Rabobank Research Team notes that markets anticipate US Q3 GDP to be revised up to 4.3% qoq, and expect monthly data to confirm the strong pace of economic activity in the US.
Key Quotes
“There are plenty of US data to digest today. Starting with the third estimate of Q3 GDP growth, the market expects upside revision to 4.3% q/q saar from the previous estimate of 3.9%. More importantly, monthly data should confirm that the pace of economic activity remains fairly decent so far in Q4 with durable goods orders seen improving to 3.0% m/m from 0.4% m/m in October.”
“While the data excluding transportation orders are expected to be less impressive at 1.0%, this would be still encouraging following the 1.1% contraction in October. With consumer spending a major driving factor for the economy, an increase in both person spending and income to 0.5% and 0.4% in November would be a constructive signal with the former underpinned by the drop in gasoline prices and the latter supported by the ongoing improvement in the labour market as reflected in solid non-farm payrolls at 243k in October and 321k in November.”
“It is worth pointing out that the fall in oil prices should not only boost consumer spending, but will also contribute to lower headline inflation. With PCE inflation likely to stay well below the official 2.0% y/y target throughout next year, we maintain Q4 2015 as our baseline scenario for the first Fed rate hike.”
Key Quotes
“There are plenty of US data to digest today. Starting with the third estimate of Q3 GDP growth, the market expects upside revision to 4.3% q/q saar from the previous estimate of 3.9%. More importantly, monthly data should confirm that the pace of economic activity remains fairly decent so far in Q4 with durable goods orders seen improving to 3.0% m/m from 0.4% m/m in October.”
“While the data excluding transportation orders are expected to be less impressive at 1.0%, this would be still encouraging following the 1.1% contraction in October. With consumer spending a major driving factor for the economy, an increase in both person spending and income to 0.5% and 0.4% in November would be a constructive signal with the former underpinned by the drop in gasoline prices and the latter supported by the ongoing improvement in the labour market as reflected in solid non-farm payrolls at 243k in October and 321k in November.”
“It is worth pointing out that the fall in oil prices should not only boost consumer spending, but will also contribute to lower headline inflation. With PCE inflation likely to stay well below the official 2.0% y/y target throughout next year, we maintain Q4 2015 as our baseline scenario for the first Fed rate hike.”