Stephanie Keith | Reuters
People shop during a Black Friday sales event at Macy’s flagship store on 34th St. in New York City, November 22, 2018.
Strong consumer spending is giving a boost to fourth-quarter GDP growth, pushing it up to 3 percent, according to a survey of economists.
Economists, participating in the CNBC/Moody’s Analytics GDP rapid update raised their forecast by 0.2 percentage points following the stronger-than-expected November retail sales report. Excluding automobiles, gasoline, building materials and food, retail sales gained 0.9 percent in November, on top of a revised 0.7 percent increase in October.
Tracking forecasts for GDP take into account incoming data, and that number is often different from economists’ actual forecasts, which now are at a median 2.4 percent for the fourth quarter.
Third quarter GDP growth was 3.5 percent, but economists have been looking for a slowdown in the fourth quarter continuing into next year.
The economists in the rapid update survey see fourth quarter growth between 2.7 percent and 3.1 percent.
Barclays economists upped their tracking forecast Friday to 2.9 percent from 2.5 percent, mostly due to retail sales.
“The acceleration in sales could be partly attributed to Black Friday and other holiday-season related shopping events during this time of the year. There were also substantial upward revisions to October’s data, both at the headline and core level. Taken together, this morning’s report points to stronger momentum in retail sales than what we had expected, and bodes well for Q4 consumption spending,” they wrote.
Consumption added 0.5 percent to GDP, but the Barclays economists just add 0.4 percentage points to GDP because the strong pickup in sales suggests a fall in inventories. Barclays also trimmed 0.1 percentage points due to lowered retail inventories.
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