From Calculated Risk two notes
On auto sales
Auto research company J.D. Power and Associates estimates an annual industry sales pace of 13.1 million vehicles for the month, about the same as September and a big jump from earlier in the year.
That seems weak to me, though its
lower higher than the number people had floating around. I would expect to see some rise from the August numbers as both Honda and Toyota sales caught up. A big number like 13.8+ wouldn’t surprise me but 13.3ish would be my baseline.
PCE should register very strong growth in the last quarter.
Which brings me to
Our tracking model of third quarter GDP has been running well ahead of our former official estimate of 1.8% growth. Today, in our US economic weekly, we officially revise up our Q3 forecast to 2.7%. We expect some of this strong momentum to carry over into the fourth quarter. We bumped up our Q4 estimate to 2.3% from 2.0%.
I am not sure how you get a baseline slower growth estimate for the last quarter than for the 3rd quarter. PCE is going to be stronger. The early signs on net exports look good.
Inventories are running tight. ISM is probably going to turn higher as we go down the stretch.