Recent Updates

  • Japan: TANKAN Summary (Q4)
  • Singapore: Average Household Consumption (Oct)
  • New Zealand: Motor Vehicle Registrations, PMI (Nov)
  • Markit PMI: Manufacturing Survey - New Zealand (Nov)
  • US: Mfg & Trade Inventories & Sales (Oct), Import/Export Prices, Adv Retail Sales (Nov)
  • Spain: CPI, HICP, Social Security Affiliations (Nov), Population (2017)
  • Ireland: CPI, HICP (Nov), Planning Permissions (Q3)
  • more updates...

Economy in Brief

U.S. GDP Growth Is Revised Higher; Corporate Profits Fall
by Tom Moeller  March 25, 2016

Economic growth was greater than previously estimated during Q4. The revised 1.4% increase (1.9% y/y) compared to last month's estimate of 1.0% and the advance estimate of a 0.7% rise. A 1.0% gain was expected in the Action Economics Forecast Survey. Economic growth during all of last year remained steady at 2.4%.

Reported for the first time, after tax corporate profits without inventory valuation & capital consumption adjustments declined 8.1% (-3.6% y/y), the fastest decline since Q1 2011. For all of last year, profits increased 3.3%, following negligible growth during 2014 & 2013.

Consumer spending accounted for much of the upward revision to GDP. Its 2.4% gain was raised from 2.0%, primarily as growth in service spending was increased to 2.8%. Recreation services spending jumped 14.2% (3.5% y/y) and restaurant & accommodations spending grew 4.4% (4.0% y/y), but housing & utilities outlays fell 1.5% (+0.5% y/y). Durable goods spending grew at an 3.8% rate as recreational good & vehicles rose 13.1% (9.5% y/y). Home furnishings & household equipment purchase grew 5.4% (6.0% y/y), but motor vehicle buying declined 5.7% (+0.7% y/y). Nondurable goods purchases improved just 0.6% growth (2.4% y/y), held back by a 2.5% decline (+2.0% y/y) in gasoline, heating oil and other energy goods purchases.

Business fixed investment spending declined at a little-revised 2.1% rate as spending on structures fell 5.1% (-3.5% y/y). Equipment spending fell 2.1% (+2.5% y/y), but intellectual property product purchases eased just 0.1% (+3.6% y/y). Residential investment strengthened 10.1% (9.4% y/y), revised from 7.9%. Government spending gained only 0.1% (1.1% y/y), held back by a 1.2% decline (+1.2% y/y) in state & local. Spending on national defense rose 2.8% (0.7% y/y).

Inventory investment sapped 0.2 percentage points from GDP growth, revised from 0.1 point. Net exports had a negative 0.1 percentage point effect on growth, revised from -0.3% points. The contribution was lessened by a 2.0% decline (-0.6% y/y) in exports, instead of -2.7%, and a 0.7% drop (+2.9% y/y) in imports, not just a slight decline.

The GDP price index rose at an unrevised 0.9% rate (1.1% y/y). The gain reflected a 0.3% rise (0.5% y/y) in the personal consumption price index. The nondurable goods price index fell 3.5% (-2.8% y/y) as gasoline prices declined. The durable goods price index declined 1.5% (-1.6% y/y) but services prices rose 1.9% (1.9% y/y). The price index for nonresidential fixed investment improved 0.4% but was unchanged y/y. The residential investment price index rose 2.1% (0.9% y/y).

The GDP figures can be found in Haver's USECON and USNA database. USNA contains virtually all of the Bureau of Economic Analysis' detail in the national accounts, including the integrated economic accounts and the recently added GDP data for U.S. Territories. The Action Economics consensus estimates can be found in AS1REPNA.

Chained 2009 $ (%, AR) Q4'15 (3rd Estimate) Q4'15 (2nd Estimate) Q4'15 (Advance Estimate) Q3'15 Q2'15 Q4 Y/Y 2015 2014 2013
Gross Domestic Product 1.4 1.0 0.7 2.0 3.9 1.9 2.4 2.4 1.5
  Inventory Effect -0.2 -0.1 -0.4 -0.7 0.0 -0.1 0.2 0.0 0.1
Final Sales 1.6 1.1 1.1 2.7 3.9 2.0 2.3 2.4 1.4
  Foreign Trade Effect -0.1 -0.3 -0.5 -0.3 0.2 -0.5 -0.6 -0.1 0.2
Domestic Final Sales 1.7 1.4 1.6 2.9 3.7 2.5 2.8 2.8 1.2
Demand Components
Personal Consumption Expenditures 2.4 2.0 2.2 3.0 3.6 2.7 3.1 2.7 1.7
Business Fixed Investment -2.1 -1.9 -1.8 2.6 4.1 1.5 2.9 6.2 3.0
Residential Investment 10.1 7.9 8.2 8.2 9.4 9.4 8.9 1.8 9.5
Government Spending 0.1 -0.1 0.7 1.8 2.6 1.1 0.7 -0.6 -2.9
Chain-Type Price Index
GDP      0.9 0.9 0.8 1.3 2.1 1.1 1.0 1.6 1.6
Personal Consumption Expenditures 0.3 0.4 0.1 1.3 2.2 0.5 0.3 1.4 1.4
 Less Food/Energy 1.3 1.3 1.2 1.4 1.9 1.4 1.3 1.5 1.5
close
large image