A 4% Fourth Quarter Is Not Out of the Question
Macro Advisers:
The unexpected strength in core sales in September implies more growth of PCE in the fourth quarter, but also more growth of imports and less inventory investment. We raised our tracking forecast of GDP growth in the fourth quarter by two-tenths to 3.8%...
Because of the peculiar ways our data system works, 1/3 of the data needed to calculate the 4Q real GDP growth rate is already in (and half the data has already happened). The growth rate from the third to the fourth quarter is, after all, 1/9 the growth rate from July to August, 2/9 the growth rate from August to September, 3/9 the growth rate from September to October, 2/9 the growth rate from October to November, and 1/9 the growth rate from November to December.
And so far, it does look a lot like 4% real GDP growth rate, -2% work hours, 6% productivity for the fourth quarter...
