Revised Q4 GDP

The revised number for annualized real GDP growth in Q4 came in very slightly below the bottom end of my previous forecast range. Back in January I had forecast:

Annualized real GDP growth for Q4 will be in the range 2.25% to 3.25% with a midpoint of 2.75%.

Although the advance estimate had come in very high at 3.5%, the preliminary estimate was knocked down to 2.2%.

All I can really say is that my midpoint forecast (2.75%) was closer to the revised number (2.2%) than the original number (3.5%.)

There will be yet another, "final" revised estimate of Q4 GDP at the end of March, which may actually be higher than this first revision.

Personally, I don't see or get much value from the GDP number, but it is the "big" number and does represent the overall aggregate of the economy and economic activity.

FWIW, the actual (nominal) growth in Q4 was $127.3 billion or 0.955% for the quarter or 3.82% annualized, to a level of $13,449.9 billion or $13.45 trillion. Adjusted for inflation the growth was $63 billion or 0.55% for the quarter or 2.2% annualized (that is the so-called "headline" number), to a "chained dollar" (2000) level of $11,506.5 billion.

Maybe the single most important fact of this report is that growth was in fact stronger than in Q3, not by a lot, but we did not see a "weakening" economy. Q1 is probably not going to be great, but it won't be a disaster either. Q2 will probably be at least somewhat stronger.

-- Jack Krupansky