Econoday Report: Gross Domestic Product 29, 2007

<%@ Language=VBScript %> Econoday Report: Gross Domestic Product 29, 2007

Gross Domestic Product

Definition
Gross Domestic Product (GDP) is the broadest measure of aggregate economic activity and encompasses every sector of the economy. Why Investors Care

Released on 11/29/07 For Q3 Preliminary 2007

Real GDP - Q/Q change - SAAR
Actual	4.9%
Consensus	4.8%
Consensus Range	4.5% to 5.2%
Previous	3.9 %

GDP price index - Q/Q change - SAAR
Actual	0.9%
Consensus	0.8%
Consensus Range	0.8% to 0.8%
Previous	0.8 %

Highlights
Third quarter real GDP was revised upward sharply to an annualized 4.9 percent from the initial estimate of 3.9 percent and was just above the consensus forecast for 4.8 percent growth. The upward revision was primarily due to a higher estimate for inventory investment and for stronger net exports. There was little change in the inflation numbers. The GDP price index was revised upward slightly to an annualized 0.9 percent from the initial estimate of 0.8 percent. The core PCE price index was unrevised at an annualized 1.8 percent. Overall, the economy had strong momentum heading into the summer's credit crunch-at least outside of housing. However, the inventory accumulation was a little on the high side but not dramatically so. The impact on manufacturing should be modest.

Market Consensus Before Announcement
Third quarter real GDP showed no slowing down despite subprime problems with an initial estimate of an annualized 3.9 percent increase, following a 3.8 percent boost in the second quarter. More recently, the international trade gap has come in narrower than expected while inventory growth has been a little on the high side. Both suggest an upward revision to GDP. The core PCE price index firmed to an annualized 1.8 percent in the third quarter, after a 1.4 percent rise in the second quarter.

Real GDP Consensus Forecast for preliminary Q3 07: +4.8 percent annual rate
Range: +4.5 to +5.2 percent annual rate

GDP price index Consensus Forecast for preliminary Q3 07: +0.8 percent annual rate
Range: +0.8 to +0.8 percent annual rate

Trends

Real GDP growth is always quoted at a quarterly annual rate. It measures how much the economy has grown over a three-month period. Quarterly growth rates are often volatile; consequently, economists also like to look at the year-over-year growth in GDP. The yearly changes tend to be more stable.

It is common to compare quarterly changes at annual rates in the GDP deflator. These can be volatile, just like the quarterly swings in real GDP growth; as a result, the trend in inflation is better determined by year- over- year changes.

Data Source: Haver Analytics

2007 Release Schedule

Released On: 1/31 2/28 3/29 4/27 5/31 6/28 7/27 8/30 9/27 10/31 11/29 12/20

Released For: Q4a Q4p Q4f Q1a Q1p Q1f Q2a Q2p Q2f Q3a Q3p Q3f