Details of the first reading on US fourth quarter GDP
All numbers q/q annualized, unless otherwise stated:
- Q3 growth was 2.0%
- Personal consumption +2.2% vs +1.8% expected
- GDP price index +0.8% vs +0.8% expected
- Core PCE q/q +1.2% vs +1.2% exp
- Durables spending +4.3%
- Business investment -1.8% vs +2.6% prior
- Home investment +8.1% vs +8.2% prior
- Exports -2.5%, imports +1.1%
- Wages/salaries +0.6%
Inventories cut 0.45 percentage points from GDP, which is something the Fed hinted at in the FOMC statement. Trade cut about 0.55 percentage points. Even without those drags, the economy was only growing about 1.7%; hardly the kind of environment that calls for rate hikes.
The good news is that the consumer was ok in the quarter. Although growth was weak, that was largely factored in and the market may take a sigh of relief that it wasn't worse.
