The BEA’s second estimate of total United States Economic activity, just out today, is 2.8 percent. This is down 70 basis points from the “advance” estimate published a month ago. The change in the estimate was driven mainly by upward revisions to imports and downward revisions to personal consumption expenditures and to nonresidential fixed investment that were partly offset by an upward revision to exports.

Our mid-November United States forecast for fourth quarter real GDP growth was for a fall of 2.6 percent, driven by the advance estimate, so if we ran our model with the new information, our fourth quarter forecast would fall a bit. The economics news on all fronts continues to confirm ongoing weakness. In particular, data releases on the housing market continue to be discouraging. Today, a report was published that stated that 10.7 million United States homeowners were “under-water”, indicating that they owed more on their mortgage than the estimated current market value. In addition, recent economic indicators continue to lead us to believe that the Holiday shopping season will be weak. Our fourth quarter forecast for the seasonally adjusted annualized growth rate of the United States economy, to be published December 16, will likely be in the range of a fall of 2.5 percent to a fall of 3 percent.