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Economy in Brief

U.S. GDP Growth Is Revised Up, But Remains Minimal
by Tom Moeller  February 28, 2013

GDP inched up by 0.1% (AR) in Q4'12 (1.6% y/y). That growth rate reversed a 0.1% slip reported in last month's advance estimate. It remained, however, a marked deceleration in growth versus a 3.1% gain in Q3. The revised figure also fell short of Consensus expectations for a revision to 0.5%. Regardless, real economic growth during all of 2012 amounted to 2.2%, up from 1.8% in 2011.

Improvement in the foreign trade deficit added 0.2 percentage points to overall economic growth instead of subtracting 0.3 points. That occurred as exports fell at a 1.0% rate (+1.8% y/y) instead of declining at a 5.7% rate as initially estimated. Imports fell at a 4.5% rate (+0.1% y/y) instead of 3.2%.

A greater amount of inventory decumulation offset foreign trade's addition. It subtracted 1.6 percentage points from economic growth last quarter instead of 1.3 points as estimated earlier. All of the reduction occurred in the nonfarm sector. That decline followed a 0.7% addition to growth in Q3. For the whole year, inventories added just 0.2% percentage points to economic growth, following a 0.2 point subtraction in 2011.

 

Revised estimates of growth in domestic final sales were minimal. The overall gain of 1.4% (1.8% y/y) was led by a 2.1% advance (1.9% y/y) in personal consumption. That was paced by a 22.6% jump (8.3% y/y) in motor vehicle purchases. Real fixed capital spending grew at an improved 9.7% rate (4.6% y/y) while growth in residential investment also was revised up to 17.4% (14.9% y/y). These gains were offset by a deepened decline in government purchases of 6.9% (-1.8% y/y).

Price inflation crept up. The 0.9% rise (1.8% y/y) compared to 0.6% estimated earlier. It still was a significant moderation from Q3 and remained the weakest in a year. For the whole year, the chain-type price index grew 1.8% after a 2.1% rise in 2011. Domestic prices rose at a steady 1.5% clip (1.6% y/y) last quarter and rose 1.7% for the full year. That's down from the 2.5% increase in 2011.

The latest GDP figures can be found in Haver's USECON and USNA databases; USNA contains basically all of the Bureau of Economic Analysis' detail on the national accounts, including the new integrated economics accounts and the recently added GDP data for U.S. Territories. The Consensus estimates can be found in AS1REPNA

 

Chained 2005 $, %, AR Q4'12 (1st Revision) Q4'12 (Advance) Q3'12 Q2'12 Q4 Y/Y 2012 2011 2010
Gross Domestic Product 0.1 -0.1 3.1 1.3 1.6 2.2 1.8 2.4
 Inventory Effect -1.6 -1.3 0.7 -0.5 -0.4 0.2 -0.2 1.5
Final Sales 1.7 1.1 2.4 1.7 2.0 2.1 2.0 0.9
 Foreign Trade Effect 0.2 -0.3 0.4 0.2 0.2 0.1 0.2 -0.4
Domestic Final Sales 1.4 1.3 1.9 1.4 1.8 1.9 1.8 1.3
Demand Components
Personal Consumption 2.1 2.2 1.6 1.5 1.9 1.9 2.5 1.8
Business Fixed Investment 9.7 8.4 -1.8 3.6 4.6 7.7 8.6 0.7
Residential Investment 17.4 15.3 13.6 8.4 14.9 12.1 -1.4 -3.1
Government Spending -6.9 -6.6 3.9 -0.7 -1.8 -1.7 -3.1 0.6
Chain-Type Price Index
GDP 0.9 0.6 2.7 1.6 1.8 1.8 2.1 1.3
Final Sales of Domestic Product 0.9 0.6 2.8 1.5 1.8 1.8 2.1 1.3
Final Sales to Domestic Purchasers 1.5 1.3 1.5 0.7 1.6 1.7 2.5 1.6
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