Real GDP growth was much stronger than we expected with consumption growth very robust.

The Advance Report for third quarter Real GDP was released last week.  The economy grew by 33.1% after falling by 5.0% in the first quarter, and 31.4% in the second quarter.  This leaves the economy 3.5% lower than the fourth quarter of 2019.  The third quarter growth was almost double our forecast of 17.1%.  Personal consumption expenditures grew much more than we expected at 40.7% versus our forecast of 21%. Capital spending also rebounded much faster than we expected at +83.0% for the quarter.  It was the consumption side of the report that recovered much more than we had forecasted.  The components of this consumption rebound also changed.  Consumers increased the purchases of goods faster than the rebound in services spending.