A Downward Revision Expected in U.S. GDP

Friday we get a second look at U.S. gross domestic product for the fourth quarter. The Commerce Department report is slated to hit the wires at 8:30 a.m. and will incorporate data that wasn’t available in the first release a month ago. Here’s what to expect:

The value of all goods and services produced in the U.S. rose at about a 2 percent annualized pace in the fourth quarter, a marked step down from the initial estimate of 2.6 percent, according to the median forecast of economists surveyed by Bloomberg. This would follow a 5 percent rate in the third quarter that was the strongest in 11 years.

While on the surface this looks bad, it was also probably caused by two of the most volatile components in GDP: trade and inventories. Household consumption, which is the biggest factor in growth, is forecast to hold at the previously reported 4.3 percent pace.

Bloomberg

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