US: Solid GDP growth underpinned strong growth in corporate profits - Wells Fargo

Today, the second reading of Q3 GDP growth was released. Analysts at Wells Fargo, point out that GDP growth was unrevised at a healthy pace of 3.5% and noted upward revisions to investment spending and inventories were offset by drags elsewhere. 

Key Quotes: 

“Q3 GDP growth was unrevised at a healthy pace of 3.5%, but the release included a few notable revisions. Consumer spending was revised lower to a 3.6% pace from 4.0% initially, but declines here were balanced by modest upward revisions to investment spending. The volatile trade environment was also evident in the revisions, with a larger build in inventories being offset by a greater drag from net exports.”

“Corporate profits continued their ascent in Q3, with before tax profits rising 10.3% compared to a year ago–the fastest pace since 2012.”

“Given slower global growth and recent dollar strength, foreign profits actually slipped $7.7B in Q3.”