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Economy in Brief
German PPI Rises at Nine-Month High Pace
The German PPI gained 0.2% in June on the heels of a 0.6% rise in May...
U.S. Leading Economic Indicators Improve
The Conference Board's Composite Index of Leading Economic Indicators increased 0.5% (5.8% y/y) during June...
Philadelphia Fed Factory Conditions Recover; Prices Surge
The Philadelphia Fed reported that its General Factory Sector Business Conditions Index rebounded to 25.7 during July...
U.S. Initial Unemployment Insurance Claims Hit Lowest Since 1969
Initial claims for unemployment insurance dropped to 207,000 during the week ended July 14...
Japan's Trade Deficit Swings Back to Surplus (Small Surplus)
Japan's early June trade results show a goods trade position having swung back to surplus in June from deficit in May...
by Tom Moeller March 30, 2005
US real GDP growth in 4Q04 was unrevised at 3.8% (AR). The Consensus expectation had been for a slight upward revision to 4.0% growth.
Reported for the first time, total U.S. operating corporate profits surged 13.5% (12.4% y/y) and the gain was held back by no change in profits earned abroad. Domestic profits grew 16.2% (18.3% y/y) and reflected a 30.1% rebound in financial sector profits which were depressed by hurricanes in 3Q.
Profits earned in the nonfinancial corporate sector grew 10.3% (24.2% y/y), the strongest gain since 2Q03 and were aided by continued profit margin expansion. Labor costs per unit of output fell for the first time in over a year as productivity remained strong. Non-labor costs continued the decline in place for nearly three years. Pricing power improved and real gross value added (output) grew a strong 1.6% (5.3% y/y).
Domestic demand growth was unrevised at 4.5% as growth in business fixed investment in equipment & software held firm at 18.4% (14.5% y/y). Consumer spending growth also held solid at 4.2% (3.8% y/y). Less computers real GDP grew 3.3% (3.8% y/y).
Price inflation was revised up slightly to 2.3%. The price index for domestic demand was revised higher to 2.9% (2.9% y/y) and continued to reflect a strong 5.3% (4.8% y/y) rise at the state & local government level.
Perspectives on Monetary Policy and Central Banking from New York Federal Reserve Bank President Timothy F. Geithner can be found here.
| Chained 2000$, % AR | 4Q '04 (Final) | 4Q '04 (Prelim. | 3Q '04 | Y/Y | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|---|
| GDP | 3.8% | 3.8% | 4.0% | 3.9% | 4.4% | 3.0% | 1.9% |
| Inventory Effect | 0.5% | 0.6% | -1.0% | 0.3% | 0.4% | -0.1% | 0.4% |
| Final Sales | 3.4% | 3.2% | 5.0% | 3.6% | 4.0% | 3.1% | 1.4% |
| Trade Effect | -1.4% | -1.4% | -0.1% | -0.6% | -0.4% | -0.3% | -0.7% |
| Domestic Final Demand | 4.5% | 4.5% | 4.9% | 4.2% | 4.4% | 3.4% | 2.1% |
| Chained GDP Price Index | 2.3% | 2.1% | 1.4% | 2.4% | 2.2% | 1.8% | 1.7% |
