Today's U.S. GDP report

Today's U.S. GDP report revealed Q3 personal income growth of -10.2% for total income and -13.2% for disposable income, leaving drops that were much smaller than analysts had assumed, after unrevised respective Q2 rates of 34.2% and 44.3%. The savings rate fell to 15.8% in Q3 from 25.7% in Q2, as CARES Act payments boosted Q2 income by substantially more than the pandemic depressed it, followed by an unwind of CARES Act payments in Q3 alongside an underlying income rebound. The GDP data imply a 5.2% Q3 productivity growth pace, following an assumed a 0.3% Q2 productivity boost to 10.4% from 10.1%. Analysts expect 43.5% Q3 growth for the BLS output measure, following a -36.8% (was -37.1%) Q2 contraction rate. Analysts expect a 38.2% Q3 growth rate for hours-worked, after an unrevised -42.9% Q2 drop. Analysts expect Q3 growth in compensation per hour of -16.0%, after a 19.9% (was 20.0%) Q2 clip. The mix should leave Q3 unit labor cost growth of -16.2%, after a revised 8.6% (was 9.0%)Q2 pace.