Courtesy of Doug Short.
The Third Estimate for Q4 GDP came in at 3.0%, unchanged from the Estimate. The consensus at Briefing.com was for GDP to remain at 30%, although the financial press reports that many economists had expected an upward revision to 3.2%.
Here is an excerpt from the Bureau of Economic Analysis news release:
The GDP estimate released today is based on more complete source data than were available for the “second” estimate issued last month. In the second estimate, the increase in real GDP was also 3.0 percent (see “Revisions” on page 3).
The increase in real GDP in the fourth quarter primarily reflected positive contributions from private inventory investment, personal consumption expenditures (PCE), nonresidential fixed investment, exports, and residential fixed investment that were partly offset by negative contributions from federal government spending and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased.
The acceleration in real GDP in the fourth quarter primarily reflected an upturn in private inventory investment and accelerations in PCE and in residential fixed investment that were partly offset by a deceleration in nonresidential fixed investment, a downturn in federal government spending, an acceleration in imports, and a deceleration in exports.
Motor vehicle output added 0.47 percentage point to the fourth-quarter change in real GDP after adding 0.12 percentage point to the third-quarter change. Final sales of computers added 0.12 percentage point to the fourth-quarter change in real GDP after adding 0.22 percentage point to the third-quarter change. [Full Release]
Here is a look at GDP since Q2 1947 together with the real (inflation-adjusted) S&P Composite. The start date is when the BEA began reporting GDP on a quarterly basis. Prior to 1947, GDP was reported annually. To be more precise, what the lower half of the chart shows is the percent change from the preceding period in Real (inflation-adjusted) Gross Domestic Product. I’ve also included recessions, which are determined by the National Bureau of Economic Research (NBER).
Here is a close-up of GDP alone with a line to illustrate the 3.3 average (arithmetic mean) for the quarterly series since the 1947. I’ve also plotted the 10-year moving average, currently at 1.7. The Second Estimate for Q4 GDP puts us closer to the mean.
Here is the same chart with a linear regression that illustrates the gradual decline in GDP over this timeframe. The latest GDP number is above the approximate 2.1 of the regression at the same position on the horizontal axis.
And for a bit of political trivia in this post-election period, here is a look a GDP by party in control of the White House and Congress.
In summary, the Q4 GDP Second Estimate of 3.0 came in above expectations. With tomorrow’s release of the BEA’s Personal Income and Outlays report for January, we will have a more detailed look at the November and December revisions to the critical component of GDP — personal consumption expenditures.
