Economists lower fourth-quarter GDP estimates, but strong holiday shopping could cause a surprise

  • Economists slashed fourth-quarter GDP growth tracking estimates by 0.3 percentage point, to a median of 2.4 percent, according to CNBC/Moody's Analytics Rapid Update.
  • The weakness in consumer spending for October was behind the cut, rising just 0.1 percent after September's half-percent gain.
  • The quarter's growth would be the first in three that didn't meet the 3 percent growth pace, if it does not turn around.
Customers shop at a Home Depot Inc. store in Jersey City, New Jersey.
Michael Nagle | Bloomberg | Getty Images
Customers shop at a Home Depot Inc. store in Jersey City, New Jersey.

Economists slashed fourth-quarter GDP growth tracking estimates by 0.3 percentage point, to a median of 2.4 percent, according to CNBC/Moody's Analytics Rapid Update.

The quarter's growth pace would be the first in three below 3 percent, if it does not turn around.

"The growth news in today's release was modestly disappointing: real consumer spending increased 0.1 percent in October, a bit shy of expectations, and September consumption growth was revised down a tenth to 0.5 percent. This leaves real annualized consumption growth in 4Q17 tracking around 2.5 percent, down from our prior estimate of 3.0 percent," wrote JPMorgan's chief U.S. economist, Michael Feroli.

Diane Swonk, CEO of DS Economics, said she did not change her 2.5 percent forecast. She said better-than-expected consumption numbers could come in for November and December, as the consumer looks set to spend more this holiday season.

Hurricanes impacted the fall numbers, with September robbing from October as consumers in storm-hit areas restocked and repaired damage to homes and vehicles. "The numbers in September were very robust, and we borrowed from October. You still had durable goods that were really robust," said Swonk.

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