Intellectual Property Helps Boost 3Q GDP Growth To Highest Level Since 2003

As was widely reported yesterday, 3Q GDP growth was the strongest since 9/30/2003. However, less widely reported was the fact the intellectual property products contributed the most to real GDP in 32 quarters (9/30/2006). Fixed investment overall contributed 121 basis points to real GDP. Residential fixed investment contributed only 10 basis points and continues to hover around 3% of GDP.

CFNAI Makes 94-Month High, Existing Home Sales Disappoint

As has seemingly been the case all year (or maybe even the past four years), we had a mixed bag of economic releases today in the United States. On the positive side, we had the Chicago Fed National Activity Index post the highest monthly number since December 2006. This indicates that the activity level in November was far above trend in the US (i.e. 3%). Perhaps more importantly, the three-month moving average broke out to its highest level since May 2010. If activity levels keep up in December, the 4Q GDP report may surprise to the upside.



On the negative side, we had today's disappointing existing home sales report. After having a run of five months when existing home sales remained about 5 million, November's report came in at 4,93 million. Consensus expectations were for 5.2 million. Existing home sales are just 2% higher year-over-year. The report also showed that the median and average selling price has declined for five straight months. However, both are still higher year-over-year. Lastly, supply remains steady at 5.1 months. Months supply has remained around the 5 month level for most of the past two years.