Inventories to result in big hit to Q3 GDP

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Inventories to result in big hit to Q3 GDP (by Steve Goldstein)

WASHINGTON (MarketWatch) -- Wholesale inventories data released Wednesday showing a 0.1% decline in September resulted in a large downgrade to third-quarter growth estimates, economists said. J.P. Morgan and Macroeconomic Advisers each cut their third-quarter GDP estimate by 0.7 percentage points -- to 1.6% and 1.7%, respectively -- compared to the first Commerce Department estimate of 2.5%. Barclays cut its tracking estimate to 1.8% from 2.4%. The decline could boost fourth-quarter output, because there was a smaller inventory accumulation during the third quarter, and Macroeconomic Advisers pushed their estimate for the final quarter up by three-tenths to 2.9%. J.P. Morgan didn't adjust fourth-quarter estimates, noting that imports could be more of a drag on fourth-quarter growth if petroleum inventories are restocked from foreign sources.

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