US Q3 GDP third estimate suggests solid domestic activity partially offset by weakness abroad

US Q3 GDP third estimate came in stronger than expected at 2% qoq saar, while market consensus expected it to be 1.9%. This is primarily coming from fixed income investment and inventories.

There was upward revision in the equipment spending to 9.9% and intellectual property investment was steady at -0.8% against an expectation of further decline.

Private inventories change was at 85.5 bn dollars against expectations of 0.8pp drop. Growth in private consumption was solid at 3% and residential investment was revised high to 8.2% compared to the second estimate. Net trade was revised to reflect a solid pullback of 0.3pp.

"Soft global growth and the lagged effects of lower energy prices and a stronger dollar continue to weigh on trade and manufacturing, the latter of which we see as reflected in the slower pace of inventory accumulation as production is adjusted to meet the slower pace of sales. We look for this pattern of growth to be maintained in Q4", says Barclays in a research note.