Courtesy of Mish.
The BEA Advance GDP Report shows real GDP rose 1.9% in the fourth quarter, 1.6% for all of 2016.
The Atlanta Fed GDPNow Model missed the mark pretty badly. Its latest forecast, on January 26, was 2.9% for fourth quarter, a number I thought way too high.
The latest FRBNY Nowcast, from January 20, was close at 2.1%. Let’s take a look at what happened.
Troubling Areas
- Residential investment rose 10.2%. Is that going to last with home prices and interest rates both rising?
- Imports are up along with the price of oil.
- Nonresidential structures are down. With minimum wages rising and store saturation, what’s the incentive to build more stores?
Contribution Troubling Areas
Private Inventories Added 1% to 4th Quarter GDP
- Private inventories added a full percentage point to GDP. That’s an inventory build that was not even needed.
- Motor vehicles and parts contributed 0.29 percentage points. Will that last?
- Residential investment added 0.37 percentage points. Will that last with interest rates rising?
- Net exports reflect rising oil prices, and a rising US dollar that has not hurt exports that much, yet.
Hike Three Times? Really?
