Global| Mar 25 2011U.S. GDP Growth Revised Up and Corporate Profits Rise
by:Tom Moeller
|in:Economy in Brief
Summary
Real GDP grew 3.1% (SAAR) last quarter, revised up from the 2.8% reported last month. The revision mostly reflected a lessened subtraction from inventory investment and improved capital spending. The Q4 figure roughly equaled [...]
Real GDP grew 3.1% (SAAR) last quarter, revised up from the 2.8% reported last month. The revision mostly reflected a lessened subtraction from inventory investment and improved capital spending. The Q4 figure roughly equaled Consensus expectations for a revision to 3.0%. Quarterly growth remained the strongest since Q1 2010 and, for the full year, real GDP rose a moderate 2.9% which reversed the 2.6% lost during 2009.
Accompanying the GDP figures were the first estimates of Q4 corporate profits. A 2.3% rise (18.3% y/y) in before-tax profits with IVA & CCA was improved from the 1.6% Q3 increase, but still was below the 3.0%-to-14.4% gains in each quarter back to early-2009. Before-tax profits without IVA and CCA fell 2.6% (+16.1% y/y) while after-tax profits fell 3.3% (+11.4% y/y).
Growth in domestic final demand was little-changed at 3.2%, due mostly to personal consumption growth of 4.0% which was little-revised as well. The strength mostly reflected a 49.2% surge in motor vehicles. Elsewhere, growth in business fixed investment (7.7%) and residential investment (3.3%) were both raised slightly. The decline in government spending (-1.7%), however, was deeper than reported earlier.
Inventories subtracted a lessened 3.4 percentage points from GDP growth last quarter. Perhaps more notable was that the $16.2B rate of accumulation was the weakest of the economic recovery. A little-changed, positive foreign trade effect of 3.3 percentage points reflected a lessened 8.6% rise (8.9% y/y) in exports and a deepened 12.6% decline (+10.9% y/y) in imports
Price inflation as measured by the chained GDP price index was unrevised at 0.4%. The price index for domestic final demand rose 1.9% (1.2% y/y) and the price index for final sales rose 0.2% (1.3% y/y). The GDP figures are available in Haver's USECON and USNA databases and the expectations number is in AS1REPNA.
| Chained 2005 $, % AR | Q4 (Final) |
Q4'10 (Prelim.) | Q4'10 (Adv.) |
Q3 2010 |
Q2 2010 |
Q4 Y/Y |
2010 | 2009 | 2008 |
|---|---|---|---|---|---|---|---|---|---|
| GDP | 3.1 | 2.8 | 3.2 | 2.6 | 1.7 | 2.8 | 2.9 | -2.6 | -0.0 |
| Inventory Effect | -3.4 | -3.7 | -3.7 | 1.6 | 0.8 | 0.4 | 1.5 | -0.5 | -0.5 |
| Final Sales | 6.7 | 6.7 | 7.1 | 0.9 | 0.9 | 2.4 | 1.4 | -2.1 | 0.5 |
| Foreign Trade Effect | 3.3 | 3.4 | 3.4 | -1.7 | -3.5 | -0.4 | -0.5 | 1.0 | -1.1 |
| Domestic Final Demand | 3.2 | 3.1 | 3.4 | 2.6 | 4.3 | 2.9 | 1.8 | -3.1 | -0.6 |
| Demand Components | |||||||||
| Personal Consumption | 4.0 | 4.1 | 4.4 | 2.4 | 2.2 | 2.6 | 1.8 | -1.2 | -0.3 |
| Business Fixed Investment | 7.7 | 5.3 | 4.4 | 10.0 | 17.2 | 10.6 | 5.7 | -17.1 | 0.3 |
| Residential Investment | 3.3 | 2.7 | 3.4 | -27.3 | 25.6 | -4.6 | -3.0 | -22.9 | -24.0 |
| Government Spending | -1.7 | -1.5 | -0.6 | 3.9 | 3.9 | 1.1 | 1.0 | 1.6 | 2.8 |
| Prices | |||||||||
| Chained GDP Price Index | 0.4 | 0.4 | 0.3 | 2.1 | 1.9 | 1.4 | 1.0 | 0.9 | 2.2 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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