Americans spent more on goods but less on clothing and
footwear than initially thought in the
third quarter, according to the government’s second estimate of the country’s
gross domestic product for the period.
The Bureau of Economic Analysis boosted its estimate of GDP
growth during the quarter to 2.1 percent from 1.5 percent after digesting
additional data that showed nonfarm private inventories, including inventory
held by retailers and distributors, declined 0.64 percent, or much less than the the 1.45
percent declined estimated last month.
Some of
the decline is due to U.S. retailers canceling or reducing orders for cold
weather apparel and footwear in response to unseasonably warm October and
November weather. Dick’s Sporting Goods, Sportsman’s
Warehouse Holdings Inc., DSW Inc., several department stores and
many independent retailers have reported lower than expected third
quarter sales in recent weeks due to unseasonably warm October weather. As reported by Sports Executive Weekly last week, Dick’s Sporting Goods is returning product, canceling orders and securing markdown allowances with vendors to reduce its exposure to slow-moving inventory, according to sSports Executive Weekly.
Revised GDP estimates released by BEA Tuesday indicate U.S. consumers
shifted more of the money they saved on lower energy bills during the period toward
non-durable goods than originally thought following several quarters in which
spending on cars and other durable goods grew faster.
The BEA upped its estimate
of growth in consumer spending on all goods to 1.05 percent from 0.99 percent. Revised
estimates show consumer spending on non-durable goods grew more than thought
while spending on durable goods grew less than indicated by advance estimates.
While consumers spent more on nondurable goods than
originally estimated, BEA took down its estimate on the increase in spending on
clothing and footwear to 0.04 percent from 0.05 percent.
It also lowered its estimate of consumer spending on services
from 1.20 percent to 1.00 percent to reflect lower spending on housing and
utilities, health care, recreation services, food and restaurants, financial and
other services. Estimates of growth in spending on transportation services remained
flat at 0.12 percent.
Consumer spending on durable goods, including automobiles, grew
less than thought, although spending on recreational vehicles grew more than indicated
by advance estimates released last month.
In its advance estimate last month, BEA attributed the
deceleration in real GDP in the third quarter primarily to a downturn in
private inventory investment and decelerations in exports, in PCE, in
nonresidential fixed investment, in state and local government spending, and in
residential fixed investment that were partly offset by a deceleration in
imports.
