US GDP Price Index Final (Q2 QQ) 6.1% vs. Exp. 6.4% (Prev. 3.6%)

Third estimates of GDP rarely carry market weight on the growth line, but the price components are a different matter: the GDP price index feeds the chain-type deflators from which the core PCE deflator is derived, and revisions to the price line have on past occasions nudged the implied PCE path even when headline growth was unchanged. The miss against consensus here is a softer-than-expected print on prices, though the step up from the prior quarter's reading is steep enough that the directional signal on underlying inflation is firmer than the surprise versus expectations. Revisions at this stage of the vintage cycle tend to reflect updated source data on prices rather than re-estimation of activity, so the read-through is to the deflator series rather than to output. The established pattern is that a lower final price index trims the implied starting point for the corresponding PCE releases, which is where the front end actually re-prices. The follow-ons worth noting are the PCE deflator prints covering the same period and any annual revision to national accounts, which historically is the point at which large discrepancies between the two price measures get reconciled. As a final estimate, this is confirmation rather than new information.