Nov. 29 - GDP grew an impressive 2.7% in third quarter thanks to holidays, but next reading may not be as cheerful. Bobbi Rebell reports.
The Daily Digit today is 2.7%. U.S. Gross Domestic Product, or GDP, grew 2.7% in third quarter, which was more than analysts expected. The reason? In short, the holidays. Stores stocked up for before the present-giving season and, as a result, inventories bounced -improving the GDP number. Another boost: an increase in exports. But- overall, people and companies spent less on goods and services. This could be a sign of GDP growth slowing in the fourth quarter, warns Beth Ann Bovino, deputy chief economist, S&P Economics. SOUNDBITE: BETH ANN BOVINO, DEPUTY CHIEF ECONOMIST, S&P ECONOMICS, (ENGLISH) SAYING: "People are worried about the fiscal cliff. Businesses have already pulled back on investing and consumers most likely are going to be a little bit more reluctant on spending now, worried, well, are they going to have higher taxes down the road." Bovino says another reason that the fourth quarter GDP will be weaker is that Super storm Sandy wreaked havoc on major parts of the Northeastern United States at the end of October.