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the latest Or ig i nat ion SECONDARY MARKET Inventories Contribute to Revised Q3 GDP Estimates se r v ic i ng The government's second report on economic growth shows a big boost from private inventories. s e c on da r y m a r k e t a na ly t ic s T Business Keeps Slowing at Freddie Mac Freddie's mortgage portfolio shrank in October at the fastest rate year-to-date. F reddie Mac's mortgage book of business declined at an annualized rate of 6.4 percent in October, marking the fourth consecutive month of declines. The book has registered declines in seven of the first 10 months of this year, according to Freddie Mac's monthly volume summary. October's pace of decline was the highest rate so far this year and is up from a 4.3 percent annualized rate reported for September. Freddie Mac's total mortgage portfolio is valued at about $1.9 trillion. 58 | The M Report New business at the GSE is also down over the month, marking the fourth consecutive month of declining new business at the GSE. Freddie Mac's purchases and issuances in October totaled about $22 billion. New business added in September was about $28 billion. Totaling $12 billion, single-family refinance-loan purchases and guarantees made up 58 percent of the GSE's total single-family portfolio purchases or issuances in October. Forty-two percent of that comprised relief refinance mortgages (based on unpaid principal balance). While Fannie Mae reported a declining serious delinquency rate among both single-family and multifamily mortgages in October, Freddie Mac recorded a decrease for single-family mortgages but a slight increase for its multifamily business. The delinquency rate for single-family mortgages at Freddie Mac in October was 2.48 percent, down from 2.58 percent in September. The serious delinquency rate for multifamily loans increased from 0.05 percent to 0.06 percent. Freddie Mac completed 7,902 loan modifications in October, bringing the year-to-date total to 68,333. hird-quarter gross domestic product (GDP) advanced ahead of initial estimates, the Bureau of Economic Analysis (BEA) reported. For the second of its three quarterly GDP reports, BEA put economic growth at an annual rate of 3.6 percent in the third quarter, well ahead of the 2.8 percent growth projected in the preliminary report released early November. Economists polled by Bloomberg expected an average 3.1 percent revision. The third and final estimate was scheduled for release December 20. According to BEA, the revision reflects an increase in private inventory investment, which was far greater than previously estimated. Private businesses increased inventories by $116.5 billion in Q 3 (compared to the original estimate of $86 billion), adding 1.68 percentage points to the change in real GDP, the bureau reported. Real final sales of domestic product (GDP minus the change in private inventories) increased 1.9 percent, falling short of a 2.1 percent increase in the second quarter. Other growth factors included personal consumption expenditures (PCE), exports, both nonresidential and residential fixed investment, and state and local government spending. Those gains were partly offset by a negative contribution from federal government spending and an increase in imports. Personal consumption growth was 1.4 percent in the third quarter compared to a 1.8 percent