By David Berman
As we mentioned in this space on Wednesday, Goldman Sachs economists blinked when they saw the reading on U.S. durable goods orders for September. They cut their estimated third quarter gross domestic product to 2.7% cent from 3% previously – and considerably lower than the consensus expectation for growth of 3.2%.
Now that the U.S. Commerce Department has reported that growth was actually 3.5% in the third quarter – according to a preliminary reading – we’re interested to hear back from Goldman Sachs. There’s no crow-eating yet, but it is interesting to see where their forecast veered from the actual result.
“GDP better than expected, due mainly to a stronger contribution from inventories than we had in our revised forecast. Final sales, at 2.5%, in line with our expectations, though the composition favored private domestic spending more than we thought.”
Meanwhile, a number of other observers remain cautious about what the better-than-expected third quarter results mean for the fourth quarter and beyond. Here’s Meny Grauman from CIBC World Markets: “But while it may appear that the good times are back for the U.S. economy, looks can be deceiving. Although we are not forecasting a double-dip recession, the stronger-than-expected jump in third quarter growth was driven by a number of temporary factors that are unlikely to provide a comparable lift in 2010."