US Final GDP Figures Unlikely to Change Much

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The US Department of Commerce will be releasing the final revision to the third-quarter GDP numbers.

Economists polled, do not expect to see many changes. Expectations are therefore flat, pointing to an unchanged print in the GDP at 2.1%. In the second revised estimates, the US GDP was bumped up from 1.9% initially to 2.1%.

While the figures are well below the 3% threshold, investors saw a silver lining in the fact that growth was still evident.

Besides the GDP data, other indicators include the personal consumption expenditure, personal spending, and income data as well. Therefore, it is more likely that the large data set will have an impact in some way.

Across all measures, economists do not expect any major changes. The GDP price index is forecast to hold steady at 1.7% while the expenditure prices will remain at 1.5%.

U.S. GDP, Q3 2019

The previous revisions to the GDP were released on November 27th. Since then, there haven’t been any more fresh releases between the periods of November 27th and today when the final revised figures are due.

There is no doubt that the growth rate in the United States has turned weaker. But data suggests that the momentum is still there. This is further fueled by the fact that the Federal Reserve has cut interest rates three times so far.

Will US GDP Rebound in the Coming Quarters?

The answer to that remains dependant on a lot of variables. There is evidence that growth, both domestically and globally, is slowing.

A number of factors are attributed to this. Particularly, the uncertainty of the US-China trade war was a major factor.

But with recent reports indicating that a trade deal has been reached, there is still some skepticism. A lot will depend on the finer details of the trade pact. For the moment, the US administration has agreed to cut some existing tariffs.

The new set of tariffs due to kick in on December 15th was also postponed. From China’s part, it is expected to raise its purchases from the United States, especially in the agricultural sector.

Given that this is not the final deal, but rather just a small step, the uncertainty from the trade remains prevalent.

Elsewhere, investors are also concerned about sluggish inflation. But the recent rate cuts by the Fed will need some time to see the effects. At its recent December meeting, the Fed also announced that it will keep interest rates steady for the whole of next year.

But, currently, speculation is rife that there is a chance of a rate cut once again in March. This entirely depends on the way the economy will perform.

The US labor market remains one of the lone bright spots in the economy. Data for November indicated that the US unemployment rate fell to 3.5% while the economy was seen adding 200k + jobs.

Impact of the Final Revised GDP Figures

From a trader’s perspective, the impact of the GDP figures will not be that high, considering that this is for the period covering the three months ending September.

Investors are more keen to see the present data that will shed light on the performance of the current, Q4 GDP performance.

Still, there is a small chance of an impact, if the data revisions turn out to be high on either side. We already noticed a bit of cheer in the markets when the second revisions turned out to be higher.

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