This will be an important week with the FOMC and labor market reports due.

The Advance report Real GDP for the third quarter came in at less than half our forecast. We had been expecting growth of 4.1% and the initial report was 2.0%. We were correct in our forecasts for consumption with personal consumption expenditures up by 1.6% (our forecast was for 1.0%) but the nature of this increase was wrong. The service sector spending increased by 7.9% while goods spending declined by 9.2%. This is a result of the supply chain problems plaguing the U.S., making many goods difficult to find. The goods that were purchased came from another draw down of inventories (-$77.7 billion) and an increase in the trade deficit which widened from $1,244.5 billion in the second quarter to $1,311.7 billion in the third quarter. We continue to meet demand with inventories and imports.