- The advance reading was +1.1% vs +2.0% expected
- Q4 final was +2.6% annualized
Details:
- Consumer spending +3.8% vs +3.7% advance
- GDP final sales +3.4% vs +3.4% expected
- PCE prices 4.2% vs 4.2% advance
- Core PCE prices 5.0% vs 4.9% expected (4.9% advance)
- GDP deflator 4.1% vs 4.0% expected
The consumer was stronger than anticipated, leading to a higher revision to Q1 GDP .
Percentage point changes
- Net trade was flat at 0.00 pp vs adding 0.11 pp to GDP in advance report and adding 0.46 pp in Q4
- Inventories cut 2.10 pp vs 2.26 pp in advance report and adding 1.46 pp in Q4
- Govt +0.89 pp vs +0.81 pp in advance vs +0.63 pp in Q4
The changes to inventories and gov't spending go a long way towards explaining the GDP upgrade and they're not particularly relevant to the underlying economy. The dollar is stronger in the aftermath but I think that's more about initial jobless claims than GDP.