According to the second release, US GDP grew by 2.7% Q/Q annualized in the third quarter, up from the first estimate of 2.0% Q/Q annualized and double the pace of growth registered in Q2. The outcome was broadly in line with expectations as the consensus was looking for an upward revision to 2.8% Q/Q.
In the details, the biggest surprise was a substantial downward revision in personal consumption (1.4% Q/Q from 2.0% Q/Q). The downward adjustment was more than offset by a strong positive adjustment in inventories (contributing 0.77% Q/Q to growth, instead of the 0.12% Q/Q drag reported in the first estimate). Also net exports were revised, adding 0.14% Q/Q to growth (compared with a drag of 0.18% Q/Q estimate in October). Revisions to gross fixed capital formation and government consumption were small. While the headline figure looks significantly stronger now, the details are softer as personal consumption was significantly downwardly revised, while the positive adjustment came mostly from a change in inventories, which may weigh on production in the fourth quarter.