Revised Q4 GDP Tumbles 26% From Initial Estimate To 2.4%; Personal Consumption Hit
So much for that blow out initial estimate of Q4 GDP that had annualized GDP at 3.2%. One month later and the number has been cut by 25% to 2.4% following a substantial downward revision to Personal Consumption, which dropped from 3.3% to 2.6%, well below the 2.9% expected. As a percentage of the acual annualized GDP number, it dropped from 2.26% to 1.73%. The other components in the calculation that had material revisions were inventories which added just 0.14% to GDP vs 0.42% in the last revision and 1.67% in Q3, as the destocking from record high inventory build up levels continues to take a bite out of growth; offsetting this was an increase in the Fixed investment estimate from 0.14% to 0.58%. Which in turn means that even more CapEx growth was pulled back into last year than previously expected, suggesting further downward cuts to Q1 2014 GDP are coming. Finally, the government deducted -1.05% from Q4 GDP as opposed to the 0.93% estimated previously.
And now, we await for the downward Q1 GDP revisions as sellside economists realize the US consumer was not nearly as strong as had been initially expected.
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