As we had been expecting, Q4 data once again continues to take downward revisions. Second revision of Q4 GDP prints at 2.8%, widely missing of 3.3% widely, compared to a 3.2% reading previously. US Personal Consumption came at 4.1% on expectation of 4.2% (Prev. 4.4%). Core PCE was 0.5%, on expectation of 0.4%. The attempt at getting the consumer to releverage, at least according to the BEA, is working: personal outlays increased from $10,736.3 to $10,883.2 resulting in a decline to savings of $55 billion. And still the economy refuses to either generate jobs to keep up with the rate of population growth, or to grow at the required rate of 4-5% nearly 2 years following the "end" of a recession. Make room for QE3.
Comparison of 1st and 2nd Q4 GDP revisions - the biggest contributors to the decline were Personal Consumption Expenditures which declined from 3.04% to 2.88%, and Imports which dropped from 2.4% to 2.17%.
From the release:
Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 2.8 percent in the fourth quarter of 2010, (that is, from the third quarter to the fourth quarter), according to the "second" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 2.6 percent.
The GDP estimates released today are based on more complete source data than were available for the "advance" estimate issued last month. In the advance estimate, the increase in real GDP was 3.2 percent (see "Revisions" on page 3).
The increase in real GDP in the fourth quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, and nonresidential fixed investment that were partly offset by negative contributions from private inventory investment and state and local government spending. Imports, which are a subtraction in the calculation of GDP, decreased.
The small fourth-quarter acceleration in real GDP primarily reflected a sharp downturn in imports, an acceleration in PCE, an upturn in residential fixed investment, and an acceleration in exports that were mostly offset by downturns in private inventory investment and in federal government spending, a deceleration in nonresidential fixed investment, and a downturn in state and local government spending.
And full year data:
Real GDP increased 2.8 percent in 2010 (that is, from the 2009 annual level to the 2010 annual level), in contrast to a decrease of 2.6 percent in 2009.
The increase in real GDP in 2010 primarily reflected positive contributions from private inventory investment, exports, PCE, nonresidential fixed investment, and federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.
The upturn in real GDP primarily reflected upturns in exports, in nonresidential fixed investment, in PCE, and in private inventory investment and a smaller decrease in residential fixed investment that were partly offset by an upturn in imports.
The price index for gross domestic purchases increased 1.3 percent in 2010, in contrast to a decrease of 0.2 percent in 2009.
Current-dollar GDP increased 3.8 percent, or $538.8 billion, in 2010. In contrast, current-dollar GDP decreased 1.7 percent, or $250.1 billion, in 2009.
During 2010 (that is, measured from the fourth quarter of 2009 to the fourth quarter of 2010), real GDP increased 2.7 percent. Real GDP increased 0.2 percent during 2009. The price index for gross domestic purchases increased 1.2 percent during 2010, compared with an increase of 0.5 percent during 2009.