The first look at US fourth quarter GDP
- Q3 GDP was 3.4%
- Q2 GDP was 4.2%
- Personal consumption +2.8% vs +3.0% expected
- Q3 personal consumption was 3.5%
- GDP ex motor vehicles +2.6%
- Year-over-year GDP +3.1%
- 2018 GDP growth was 2.9% (best since 2015)
- Commerce Dept says government shutdown subtracted about 0.1 pp from Q4
Inflation data:
- GDP price index 1.8% vs 1.7% expected (prior was 1.8%)
- Core PCE 1.7% q/q vs 1.6% expected (prior was 1.6%)
Details:
- Inventories added 0.13 pp to GDP
- Inventory change +$97.1B
- Exports +1.6%, imports +2.7%
- Net exports subtracted 0.22 pp from GDP
- Home investment -3.5%
- Business investment in structures -4.2%
- Business investment +6.2%
- Business investment in equipment +6.7%
- Business investment in IP and software +13.1%
This is significantly stronger than expected and that lifted the US dollar around 20 pips across the board. I think there is some skepticism here because some of the December numbers have been soft but there are no big red flags in this report. Consumption at 2.8% wasn't particularly high but capex at +6.2% beat where most economists pegged it. Inventories had expected to be a small drag but provided a small boost, net exports also weren't as negative as feared. There's a risk that both are revised worse or pushed into Q12019.
This report is generally released about a month earlier but was delayed due to the government shutdown.
