We got the Q4 GDP report this morn. Largely meeting expectations, real GDP increased +3.2% in annual terms in Q4. Beware, this is the "advance" estimate. The "second" estimate for Q4 arrives Feb. 28th. In Q3, real GDP increased +4.1%. Positives: - Personal consumption expenditures (a very good thing for stocks), - Exports (a good thing), - Nonresidential fixed investment (a good thing for health of business), - Private inventory investment (good to see stores stocking up), and - State and local government spending (a good thing telegraphed by sales taxes). Negatives: - Federal government spending (the sequester) and - Residential fixed investment (truly not a good thing). - Imports, which subtract in calculating GDP, increased (in sync with personal consumption). Deceleration from the +4.1 Q4 GDP number to a +3.2% Q3 number reflected a lower inventory number, lower federal gov't spending (the sequester), and lower home investing. Big news, as far as I was concerned, was the Q3 uptick of +3.3% in consumption and +11.4% in exports. My RTI question: Will U.S. GDP Numbers Stop the Stock Market Slide?
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