–4Q Chain Price Index Revised Up To +0.9%, Core PCE Prices Now +1.3%
–Final Sales Growth Revised Up To +1.1% From Previous +0.8%
By Kevin Kastner
WASHINGTON (MNI) – US fourth quarter GDP was revised up to a 3.0%
annual rate on revisions to consumption, fixed investment, net exports,
and government spending, data released by the Commerce Department
Wednesday morning showed.
Offsetting the upward adjustments to those categories was a
slightly downward revision to inventory growth, which many analysts had
expected.
Forecasts for the first revision to fourth quarter GDP expected to
growth rate to remain at 2.8%. The revision to 3.0% puts fourth quarter
GDP even further above its third quarter growth rate of 1.8%.
The chain price index was revised up sharply to a 0.9% annual rate
increase from the advance estimate of a 0.4% rise, while current dollar
GDP was revised up to a 3.9% growth rate from the 3.2% rate reported in
the advance estimate. The 0.9% rise in the chain price index is still
the lowest since the 0.3% rise in the third quarter of 2009.
The closely-watched core PCE price index was revised up to a 1.3%
increase from the advance estimate of a 1.1% gain, while the price index
for gross domestic purchases was revised up to 1.1% from the 0.8%
advance estimate. The implicit price deflator was revised up to a 0.9%
gain from the 0.4% rise in the advance estimate.
Nonresidential fixed investment growth was revised up to a 2.8%
annual rate from the advance estimate of 1.7%, but is still well below
the 15.7% rate in the third quarter. The drop in structures investment
was revised up to a 2.6% decline from the advance estimate of a 7.2%
decline. Growth in equipment and software, however, was revised down to
4.8% rise from the previously reported 5.2% increase.
PCE growth was revised up slightly to a 2.1% increase from the 2.0%
increase in the advance estimate, due to upward adjustments for durables
goods spending and services spending, offset by a sharp downward
revision to nondurables spending. PCE rose 1.7% in the third quarter.
The upward revision to services spending, which is now contributing
0.26 to fourth quarter GDP compared with the previous 0.10 contribution,
reflected new source data for cellular phone services, according to the
Commerce Department.
Durable goods consumption is now reported up 15.3% compared with
the 14.8% advance estimate, while nondurable goods consumption now
stands at a 0.4% gain, a downward adjustment from the 1.7% rise
previously reported.
Residential fixed investment growth was revised up to an 11.5%
increase in the fourth quarter from the 10.9% advance estimate and is
now even further above the 1.3% rise in the third quarter.
The net export gap was revised to $404.4 billion in the fourth
quarter from the $405.8 billion advance estimate. The narrower gap was
the result of a sharp downward adjustment to imports, offset by a
smaller downward revision to exports. The net export gap was $402.8
billion in the third quarter.
Government spending growth was revised up slightly to a 4.4% rate
of decline from the advance estimate of a 4.6% drop. Government spending
fell only 0.1% in the third quarter. The upward adjustment to the fourth
quarter was due to improvements for both federal and state and local
spending, though spending continued to negative at both levels.
The change in business inventories was revised down slightly to a
$54.3 billion gain from the $56.0 billion gain in the advance estimate.
Inventories fell $2.0 billion in the third quarter.
The revisions to fourth quarter GDP did not impact the full year
calculations, which still show 2011 GDP rose 1.7%, down from 3.0% in
2010. On a fourth quarter-fourth quarter basis, 2011 GDP was up 1.6%,
same as the estimate included in the fourth quarter advance report.
** Market News International Washington Bureau: 202-371-2121 **
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