Commerce Department Upwardly Revised Q3 2015 GDP
The Commerce Department reported that the US economy grew at a slightly faster pace during Q3 2015 than previously stated. The Department upwardly revised the rate of Q3 gross domestic product growth to 2.1 percent, in line with economists’ forecasts. The third estimate is up from the second estimate of 1.5 percent growth, but is still weaker than the 3.9 percent GDP growth in the second quarter. The AP reported the upward revision is attributed to stronger business inventory numbers. The initial estimate of third quarter GDP indicated business inventories reduced growth by 1.4 percent, but the Commerce Department reduced that drag to 0.6 percent. The AP adds that the new estimate “should give the Federal Reserve confidence as it considers an interest rate hike at its next meeting in December.” Reuters reported that MUFG Union Bank economist Chris Rupkey said, “The economy continues to move along at a good clip relative to its potential. With growth like this, the Fed has the data it needs to light the candle finally and lift off on December 16.” Bloomberg News reported that the new estimate reflects “a smaller hit from efforts to rein in bloated inventories,” which “grew at a $90.2 billion annualized rate from July through September, almost twice as much as previously estimated.” USA Today reported that trade “was more of a drag on the economy than initially estimated as a strong dollar made exports more expensive for foreign customers and imports cheaper for US consumers. Exports increased just 0.9%, while imports rose 2.1%.”
What This Means For Small Businesses
News that the US economy may have performed slightly better than previously expected unfortunately does little to mitigate the continued sluggish pace of growth. As NFIB Chief Economist William Dunkelberg said in the latest NFIB report on Small Business Economic Trends, “GDP growth languished in Q3, and will not likely impress in Q4. The industrial sector is weakening and the small business sector has not returned to its historical role in the production of GDP and jobs.” Small business owners should remain prepared for a possible continued slowdown of the economy.
Additional Reading
The Wall Street Journal also reported on the story.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.
