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GDP:  Q3 Revised Lower As Q4 Comes to Close

December 21, 2018
Bottom Line: Economic activity was revised modestly lower in the 3rd Quarter with most of the 10 basis point revision coming from lower consumption than previously estimated. This means that consumption decelerated modestly late in the 3rd Quarter and suggests that the 4th Quarter likely started a touch slower than previously thought. The 4th Quarter ends a week from Monday with a government shutdown looming. The data released so far for October, November and early December suggest that 2018 Q4 economic activity grew at a slower pace than in Q3-18; many early estimates are between 2.5% to 3.0%. Any shutdown should have almost no impact on the 4th Quarter but might impact 1st Quarter data depending on its duration -- President Trump tweeted earlier today that it could be "a shutdown that will last for a very long time."

GDP was REVISED LOWER by 0.1 percentage points to 3.4% in this third estimate for 2018 3rd Quarter.
This compared with market expectations for no change revision to 3.5%. Economic activity is now 3.0% above its year ago level.

In final sales categories, imports and fixed investment were revised higher while , net exports, residential investment, exports, consumption and government purchases were revised lower.

As a result of all of these changes, real final sales was revised down by 0.2 percentage points to 1.0% while real domestic demand was revised down by 0.1 percentage points to 2.9%.

The GDP Price Index was REVISED UP by 0.09 points to 1.8%, compared with market expectations of 1.7%. Economy-wide prices are now 2.3% ABOVE year ago levels.