Following a one month delay due to the government shutdown in January, moments ago the BEA reported GDP for the fourth quarter combining both its first and second estimates, and while consensus was expecting a sharp slowdown in the last quarter of the year, from 3.4% in Q3 to 2.2%, the US economy surprised to the upside in Q4, when it grew a stronger than expected 2.6%. As the BEA explained, "This initial report for the fourth quarter and annual GDP for 2018 replaces the release of the 'advance' estimate originally scheduled for January 30th and the 'second' estimate originally scheduled for February 28th.".
On a year over year basis, 2018 GDP rose 3.1%, the highest print since 2005, and another chance for Trump to claim an economic win, although as Joseph Lavorgna notes, "At present, we're still looking for sub-2% growth in the current quarter" and adds that these data also have no bearing on #Fed policy which is comfortably on perma-hold.
Despite the headline beat, personal consumption disappointed, and after rising at a 3.5% rate in Q3, in Q4 it rose just 2.8%, missing expectations of 3.0%. Elsewhere, nonresidential fixed investment, or spending on equipment, structures and intellectual property jumped 6.2% in 4Q after rising 2.5% prior quarter.
Personal consumption contributed 1.92% to the bottom line 2.59% number, down from 2.37% in Q3. Fixed Investment rebounded from Q3's 0.21% to 0.69% in Q4. Growth in private inventories, which drove much of the Q3 GDP jump, hit a pothole, rising just 0.13% in Q4 after the prior quarter's 2.33% jump.
The personal saving rate - personal saving as a percentage of disposable personal income - was 6.7 percent in the fourth quarter, compared with 6.4 percent in the third quarter.
Other details from today's GDP report showed that the Fed's "Pause" may have been a tad premature, with core PCE rising 1.7% in Q4 after rising 1.6% prior quarter, and slightly beating expectations of a 1.6% print.
The GDP price index also beat expectations, printing at 1.8% in Q4, above the 1.7% expected, and in line with last quarter.
https://www.zerohedge.com/news/2019-02-28/us-economy-grew-most-2015-after-unexpectedly-strong-q4-gdp-print
On a year over year basis, 2018 GDP rose 3.1%, the highest print since 2005, and another chance for Trump to claim an economic win, although as Joseph Lavorgna notes, "At present, we're still looking for sub-2% growth in the current quarter" and adds that these data also have no bearing on #Fed policy which is comfortably on perma-hold.
Despite the headline beat, personal consumption disappointed, and after rising at a 3.5% rate in Q3, in Q4 it rose just 2.8%, missing expectations of 3.0%. Elsewhere, nonresidential fixed investment, or spending on equipment, structures and intellectual property jumped 6.2% in 4Q after rising 2.5% prior quarter.
Personal consumption contributed 1.92% to the bottom line 2.59% number, down from 2.37% in Q3. Fixed Investment rebounded from Q3's 0.21% to 0.69% in Q4. Growth in private inventories, which drove much of the Q3 GDP jump, hit a pothole, rising just 0.13% in Q4 after the prior quarter's 2.33% jump.
The personal saving rate - personal saving as a percentage of disposable personal income - was 6.7 percent in the fourth quarter, compared with 6.4 percent in the third quarter.
Other details from today's GDP report showed that the Fed's "Pause" may have been a tad premature, with core PCE rising 1.7% in Q4 after rising 1.6% prior quarter, and slightly beating expectations of a 1.6% print.
The GDP price index also beat expectations, printing at 1.8% in Q4, above the 1.7% expected, and in line with last quarter.
https://www.zerohedge.com/news/2019-02-28/us-economy-grew-most-2015-after-unexpectedly-strong-q4-gdp-print
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