Economists Say US Q4 Growth Could Be Revised Upwards

U.S. fourth-quarter growth is likely to be revised higher after services industry data on Wednesday suggested a much stronger pace of consumer spending than the government had previously assumed, according to economists.

The government last month slashed its gross domestic product estimate for the October-December quarter to a 2.4 percent annual pace from a previously reported 3.2 percent rate.

JPMorgan and forecasting firm Macroeconomic Advisers said the quarterly services survey, from which the government’s estimates for services consumption is derived, showed a much more robust pace of consumer spending in the fourth quarter than the government’s estimated 2.6 percent rate.

“We now believe real consumption increased 3.4 percent,” said Silver in a research note. “We are raising our tracking estimate of fourth quarter real GDP growth to 3.0 percent.”

Macroeconomic Advisers raised its tracking estimate of fourth-quarter GDP growth by five-tenths of a percentage point to 2.9 percent.

“Key components of the quarterly services survey were above the government’s assumption, with the largest positive surprise at non-profit hospitals,” said Ben Herzon, a senior economist at Macroeconomic Advisers in St. Louis.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza