Real GDP holds at 4.9% in 3rd Qtr, but Inflation Rises

Third quarter final GDP growth held at 4.9% annualized, as expected.This is the fastest quarterly growth pace in four years. The fourthquarter is expected to show a dramatic deceleration, to around 1%annualized growth. Consumer spending rose to 2.8% from 2.7%, asexpected.
The bad news today was in the inflation indicators, which unexpectedlyrose. For the third quarter, the GDP price index rose to 1% from theoriginal estimate of +.9%. Core PCE rose to 2% QoQ from the original1.8% growth expectation. Tomorrow the November PCE inflation numberswill be reported.
Corporate profit revisions showed companies made less than previouslyreported, but personal incomes were revised up to a 6% annualizedgrowth rate from 5.8% previously.