Poway,
You are right about invesntory build up and it probably explains why the durable goods numbers went down yesterday because manufacturers are probably waiting to clear inventories. However, even if you exclude the effect of higher inventory, the GDP number would come out to be closer to 2% which was closer to the consensus estimate by bloomberg. The same consensus for Q4 now is 2.6% I guess. BTW, Beige book pointed to moderate growth and didn’t show any frightening signs of recession, inflation and labour cost estimates were reduced, corporate profits hit record highs in Q3 (31.4%), buisness spending revised upwards, commercial construction revised upwards, etc. On the other hand, consumer spending was revised downwards and most of that contributed towards services which is good for jobs but bad for factories/retailers. So its a mixed bag.
