US GDP Growth Confirmed At 1.9% In Q4


The US economy advanced an annualized 1.9 percent on quarter in the last three months of 2016, slowing from a 3.5 percent growth in the previous period and matching earlier estimates. Consumer spending rose faster than anticipated while business investment was revised lower. In 2016, the GDP expanded 1.6%, the lowest since 2011.

Personal consumption expenditure (PCE) contributed 2.05 percentage points to growth (1.7 percent in the previous estimate) and rose 3 percent (2.5 percent in the previous estimate). Spending increased more than anticipated for durable goods (11.5 percent from 10.9 percent in the previous estimate), nondurable goods (2.8 percent from 2.3 percent in the earlier estimate) and services (1.8 percent from 1.3 percent in the earlier estimate).

Fixed investment added 0.51 percentage points to growth (0.67 percentage points in the earlier estimate) and increased 3.2 percent, compared to a 4.2 percent expansion in the previous release. Investment rose less for equipment (1.9 percent from 3.1 percent); residential (9.6 percent from 10.2 percent) and intellectual property products (4.5 percent from 6.4 percent) while investment in structures slumped 4.5 percent, slightly less than a 5 percent drop in the previous estimate.

Private inventories added 0.94 percentage points to growth, lower than 1 percentage points in the previous estimate but still the biggest contribution since the first quarter of 2015.  

Meanwhile, exports shrank 4 percent, slithly better than a 4.3 percent drop initially estimated reversing and imports increased at a faster 8.5 percent (8.3 percent in the previous estimate), bringing the impact from trade to -1.7 percent (matching earlier estimates). It is the biggest drag since the second quarter of 2010. 

Government spending and investment added 0.06 percentage points to growth (0.21 percent in the previous release) and rose 0.4 percent (1.2 percent in the preliminary estimate).

Considering full 2016, private investment slumped for the first time since 2009 (-1.6 percent from -1.5 percent in the advance estimate), dragged down by structures (-3 percent from -3.1 percent) and equipment (-2.9 percent from -2.8 percent). Consumer spending  rose 2.7 percent, the same as in earlier estimates and public spending and investment increased slightly less (0.8 percent from 0.9 percent). Exports went up 0.4 percent and imports rose 1.1 percent, matching earlier estimates. 

BEA | Joana Taborda | joana.taborda@tradingeconomics.com
2/28/2017 1:57:33 PM