The first look at fourth quarter GDP

  • Prior was 3.5%

Personal consumption

  • 2.5%
  • Expected 2.5%, prior 3.0%

Inflation

  • GDP price index 2.1%
  • GDP price index was expected at +1% q/q, prior was +1.7%
  • Core PCE 1.3%
  • Core PCE expected at +1.3% q/q, prior was +1.7%

Q1 was 0.8%, Q2 was 1.4%, Q3 was 3.5%.

Details on growth:

  • Durables +10.9%
  • Business investment +2.4%
  • Investment in equipment +3.1%
  • Business investment in IP +6.4%
  • Business investment in structures -5.0%
  • Housing investment +10.2%
  • Exports -4.3%
  • Imports +8.3%
  • Inventories +48.7B vs +7.1B in Q3
  • Government spending +1.2%

To break it down in percentage points:

  • Consumer spending +1.7 pp
  • Investment +1.67 pp
  • Net exports -1.7 pp
  • Government +0.21 pp
  • Inventories alone added 1.0 percentage points to growth

Housing investment was another big driver but trade was a heavy drag. There's talk that the big surge in soybean exports in Q3 was reversed in Q4, which was largely expected. It's the kind of thing Donald Trump will jump on.

On the year, it looks like growth was 1.6%. The good news was the pickup in business investment. That's a sign of business confidence but if you back up, business investment contracted 0.4% in 2016 with a 2.8% decrease in investment.