Preliminary Version for 3rd Quarter (2nd Release), Annualized
Provided by: Department of Commerce

Personal Consumption: 2.9%, adv. 3.4%, pr. -0.9% (2Q),
0.6% (1Q), -3.1% (4Q), -3.8% (3Q). 1.2% (2Q)
PCE Price Index: 2.7%, adv. 2.8%, pr. 1.4% (2Q), -1.4% (1Q),
-4.9% (4Q), 5.0% (3Q), 4.3% (2Q), 3.5% (1Q)
Core PCE Price Index: 1.3%, adv. 1.4%, pr. 2.0% (2Q),
1.1% (1Q), 0.9% (4Q), 2.4% (3Q), 2.2% (2Q)
GDP Price Index: 0.5%, adv. 0.8%, pr. 0.0% (2Q), 1.9% (1Q),
0.5% (4Q), 4.2% (3Q), 1.1% (2Q), 2.6% (1Q)

The US economy's recovery wasn't as strong as earlier believed as the government revised its third quarter figures to show a wider trade deficit and lower consumer spending than previously estimated. GDP rose at a 2.8% annual rate after falling 0.7% in the second quarter. The advance release had the economy climbing 3.5%. Consumer spending was revised down to show an increase of 2.9% from 3.4% originally reported. It contributed 2.1 percentage points to GDP at annual rates. Another factor in lower growth was a wider trade deficit, as an upward revision to imports offset an upward revision to exports. Finally, lower nonresidential business investment was weaker than originally reported as well. 

Advance Version for 3rd Quarter (1st Release), Annualized
Provided by: Department of Commerce

Personal Consumption: 3.4%, forecast 3.0%, pr. -0.9% (2Q),
0.6% (1Q), -3.1% (4Q), -3.8% (3Q). 1.2% (2Q)
PCE Price Index: pr. 0.5% (2Q), -1.4% (1Q), -4.9% (4Q),
5.0% (3Q), 4.3% (2Q), 3.5% (1Q)
Core PCE Price Index: 1.4%, forecast 1.4%, pr. 2.0% (2Q),
1.1% (1Q), 0.9% (4Q), 2.4% (3Q), 2.2% (2Q)
GDP Price Index: 0.8%, pr. 0.0% (2Q), 1.9% (1Q), 0.5% (4Q),
4.2% (3Q), 1.1% (2Q), 2.6% (1Q)

US GDP rose 3.5% on an annualized basis in the 3rd quarter. It was a figure that was better than expectations, and comes on a big increase in personal consumption. Household purchases rose 3.4%, and were aided by government stimulus programs such as "cash-for-clunkers." There was a 22% increase in durable goods, with auto sales leading the way. Home building was a positive contributor to GDP, adding 0.5% to the overall growth number. Home builders saw sales rebound, again with government stimulus in the form of an $8,000 tax credit for first-time buyers helping to increase demand. Total inventories continued to drop, which could set the stage for better factory production in the 4th quarter, though the fact that they fell less than the record pace in the 2nd quarter benefited growth in this quarter.

Now, the focus will be on the strength of the recovery, as government stimulus in the auto and housing sectors recede, while unemployment has yet to turn the tide. Also, the Federal Reserve, which has been supporting financial markets with very loose monetary policy, will be pressured to begin an exit strategy for their emergency programs and low rates as in time to stem a pick up in inflation.

The data helped the Euro to rally as the better-than-expected figure increased risk appetite. 

Final Version for 2nd Quarter (3rd Release), Annualized
Provided by: Department of Commerce

Personal Consumption: -0.9%, prel. -1.0%, adv. -1.2%,
pr. 0.6% (1Q), -3.1% (4Q), -3.8% (3Q). 1.2% (2Q)
PCE Price Index: 0.5%, prel. 0.5%, adv. 0.7%, pr. -1.4% (1Q),
-4.9% (4Q), 5.0% (3Q), 4.3% (2Q), 3.5% (1Q)
Core PCE Price Index: 2.0%, prel. 2.0%, adv. 2.0%, pr. 1.1% (1Q)
0.9% (4Q), 2.4% (3Q), 2.2% (2Q)
GDP Price Index: 0.0%, prel. 0.2%, adv. 0.2%, pr. 1.9% R (1Q),
0.5% (4Q), 4.2% (3Q), 1.1% (2Q), 2.6% (1Q)

The final version of 2nd quarter GDP showed that the US economy shrank an annualized 0.7%, following a 6.4% decrease in the 1st quarter. Today's figure surprised forecasts which had called for a downward revision. Consumer spending was down 0.9%, slightly lower than previously reported while a smaller decline in business investment on equipment and software that originally estimated also contributed to the improved reading on GDP. Business spending fell  at a 4.9% annual pace, compared with the 8.4% decline announced last month. The data also revealed a bigger drop in inventories which can help set the stage for increased manufacturing orders.

Economists believe the economy escaped the technical definition of a recession in the 3rd quarter, after 4 straight quarters of declines, the longest streak since the Great Depression. Consumer spending and the manufacturing sector were assisted by the government's "cash for clunkers" program while the housing market benefited from tax credits for first-time home buyers. Though those steps helped to temper the economic slump, it remains to be seen how strong the recovery will be as unemployment climbs towards 10% and incomes stagnate. 

Preliminary Version for 2nd Quarter (2nd Release), Annualized
Provided by the Department of Commerce

Personal Consumption: adv. -1.2% pr. 0.6% (1Q), -3.1% (4Q),
-3.8% (3Q). 1.2% (2Q)
PCE Price Index: 0.5%, adv. 0.7%, pr. -1.4%(1Q), -4.9% (4Q),
5.0% (3Q), 4.3% (2Q), 3.5% (1Q)
Core PCE Price Index: 2.0%, adv. 2.0%, pr. 1.1% (1Q) 0.9% (4Q),
2.4% (3Q), 2.2% (2Q)
GDP Price Index: 0.2%, adv. 0.2%, pr. 1.9% R (1Q), 0.5% (4Q),
4.2% (3Q), 1.1% (2Q), 2.6% (1Q)

GDP data surprisingly remained unchanged from its advance version, showing a 1% contraction for the economy. Expectations had called for a downward revision of 1.3% to 1.5%. Inventory liquidation was deeper than first thought, but consumer spending was not as weak, with the two mainly offsetting each other. With inventories down $159.2 billion in the second quarter, revised from $141.1 billion, it sets the stage for an increase in orders as firms try to restock. That will be a boost to manufacturing.  Consumer spending meanwhile was revised upward to show a 1% decline from the advance version's 1.2% contraction. Exports fell by a smaller 5% that the 7% originally reported, but business sepnding fell 10.9%, a weaker figure than the 8.9% reported earlier. 

The data helps to push the theme that the US economy is coming our of recession with economists expecting the 3rd quarter to show positive growth. A recovering US will help the global recovery and can extend investor sentiment which has been buoyed by recovery prospects.

Advance Version for 2nd Quarter (1st Release), Annualized
Provided by the Department of Commerce

Personal Consumption: -1.2% pr. 0.6% (1Q), -3.1% (4Q),
-3.8% (3Q). 1.2% (2Q)
PCE Price Index: 0.7%, pr. -1.4%(1Q), -4.9% (4Q), 5.0% (3Q),
4.3% (2Q), 3.5% (1Q)
Core PCE Price Index: 2.0%, pr. 1.1% (1Q) 0.9% (4Q), 2.4% (3Q),
2.2% (2Q)
GDP Price Index: 0.2%, forecast 1.0%, pr. 1.9% R (1Q), 0.5% (4Q),
4.2% (3Q), 1.1% (2Q), 2.6% (1Q)

GDP declined 1.0% in the 2nd quarter, while the 1st quarter's growth figures were revised down to show a 6.4% decline. Personal consumption, which makes up about 70% of GDP fell 1.2%, wiping away the gains in spending seen in the 1st quarter. With unemployment remaining a huge concern, while wages remain subdued it is no wonder the US consumer is saving more, though that limits economic activity. Inventory liquidation subtracted 2.3% from GDP in the 1st quarter, while it only took away 0.83% in the 2nd quarter. Companies will soon have to restock, which will help factory orders. Business spending was down 8.9%, following a decrease of 39.2% in the 1st quarter. 

Preliminary Version for 1st Quarter (2nd Release), Annualized
Provided by the Department of Commerce

Personal Consumption: 1.5%, adv. 2.2%, pr. -4.3% (4Q), , -3.8% (3Q).
1.2% (2Q)
PCE Price Index: -1.0%, adv. -1.0%, pr. -4.9% (4Q), 5.0% (3Q),
4.3% (2Q), 3.5% (1Q)
Core PCE Price Index: 1.5%, adv. 1.5%, pr. 0.9% (4Q), 2.4% (3Q),
2.2% (2Q)
GDP Price Index: 2.8%, adv. 2.9% pr. 0.5% (4Q), 4.2% (3Q), 1.1% (2Q),
2.6% (1Q)

US GDP for the first quarter was revised to show a slightly slower pace of contraction. The economy shrank 5.7%, compared to the originally reported 6.1% decline. Less inventory liquidation and a smaller drop in exports were factors in the adjustment. The data showed that corporate profits rose 12.9%, after plunging by 28.4% in the forth quarter, bolstering the case that the recession may have bottomed. Personal consumption was revised down to 1.5% from the advance version's 2.2%, though that is still a big improvement compared to the past two quarters.  

Advance Version for 1st Quarter (1st Release), Annualized
Provided by the Department of Commerce

Personal Consumption:  2.2%, forecast 0.8%, pr. -4.3% (4Q), , -3.8% (3Q).
1.2% (2Q)
PCE Price Index: -1.0%, pr. -4.9% (4Q), 5.0% (3Q), 4.3% (2Q), 3.5% (1Q)
Core PCE Price Index: 1.5%, forecast 1.2%, pr. 0.9% (4Q), 2.4% (3Q),
2.2% (2Q)
GDP Price Index: 2.9%, forecast 1.8%, pr. 0.5% (4Q), 4.2% (3Q), 1.1% (2Q),
2.6% (1Q)

US GDP fell more than expected in the 1st quarter. Growth was down an annualized 6.1%, barely changing from the 6.3% decline seen in the 4th quarter. Business cut spending and slashed inventories, while investment in housing was also a major drag. Consumer spending increased 2.2%, a return to positive territory following two quarter of negative readings. Inflation measures also saw an uptick, beating forecasts, which could indicate that the programs enacted by the Fed and government are having an effect on deterring deflation. The price index for personal consumption expenditures fell by 1%, compared to the 4.9% decline seen in the 4th quarter. The PCE price gauge excluding food and energy prices rose 1.5%. An aggressive drawdown of inventories was a big part of the decline in the 1st quarter, but that is necessary in order to flush out stockpiles and end a freefall in industrial production. If inventories are run down companies will place new orders for goods which could help the results in the 3rd quarter. Trade helped the GDP balance, but only beacuse imports were down more than exports. 

Final Annualized Version for 4th Quarter (3rd Release)
Provided by the Department of Commerce

Personal Consumption: -4.3%, prel. -4.3%, pr. -3.5% (4Q), -3.8% (3Q).
1.2% (2Q)
PCE Price Index: -4.9%, prel. -5.0%, pr. -5.5% (4Q), 5.0% (3Q), 4.3% (2Q),
3.5% (1Q)
Core PCE Price Index: 0.9%, prel. 0.8%, pr. 0.6% (4Q), 2.4% (3Q),
2.2% (2Q)
GDP Price Index: 0.5%, prel. 0.5%, pr. -0.1% (4Q), 4.2% (3Q), 1.1% (2Q),
2.6% (1Q)

The US economy contracted at a 6.3% annualized pace in the 4th quarter, the final version of GDP showed. That was a slight downward revision from the 6.2% seen in the preliminary release. The downward revision was a result of inventory liquidation, as personal consumption was unrevised. Though the data shows the economy contracting at the fastest pace in 26 years, the downward revision was milder than what was expected by economists. The first quarter of 2009 may have shown just as serious a deterioration, as many key indicators headed lower to start 2009. It remains to be seen if some of the more positive releases recently help to minimize the contraction expected in the first quarter. 

Preliminary Annualized Version for 4th Quarter
Provided by the Department of Commerce

Personal Consumption: -4.3%, pr. -3.5% (4Q), -3.8% (3Q). 1.2% (2Q)
PCE Price Index: -5.0%, pr. -5.5% (4Q), 5.0% (3Q), 4.3% (2Q), 3.5% (1Q)
Core PCE Price Index: 0.8%, pr. 0.6% (4Q), 2.4% (3Q), 2.2% (2Q)
GDP Price Index: 0.5%, pr. -0.1% (4Q), 4.2% (3Q), 1.1% (2Q), 2.6% (1Q)

US 4th quarter GDP was revised lower in its second release to show a 6.2% annualized decline compared to the previously posted 3.8% decline. The result was worse than expected, and will pressure US equities in today's trading. Downward revisions in inventory growth, consumer spending and exports were the main factors in the fall in the data. Inventories alone appeared to account for about half of the downward revision as they shrank $19.9 billion instead of rising by $6.2 billion as Commerce originally reported.