Global| Feb 25 2021U.S. GDP Growth Revised Up Minimally in Q4'20
by:Tom Moeller
|in:Economy in Brief
Summary
• Year-end GDP growth remains markedly below Q3's growth with broad-based component weakening. • Decline in activity during all of 2020 remains largest of post-WWII period. • Price gains remain lower in Q4. Real GDP rose 4.1% (SAAR) [...]
• Year-end GDP growth remains markedly below Q3's growth with broad-based component weakening.
• Decline in activity during all of 2020 remains largest of post-WWII period.
• Price gains remain lower in Q4.
Real GDP rose 4.1% (SAAR) during Q4'20 (-2.4% y/y) following a record 33.4% gain during Q3. The rise was increased from 4.0% reported initially and it matched expectations in the Action Economics Forecast Survey. Combined with declines during Q1 and Q2, GDP fell 2.4% Q4/Q4.
Inventory accumulation added 1.1 percentage points to growth last quarter, revised from 1.0, after adding 6.6 points in Q3. Foreign trade deficit deterioration subtracted an unrevised 1.5 percentage points from growth. Exports rose 21.8% (-11.0% y/y) following a 59.6% rise while imports strengthened 29.6% (-0.6% y/y) after surging 93.0%.
Domestic final sales increased an unrevised 4.4% (-1.5% y/y) following a 29.8% Q3 gain which recovered the prior quarter's decline. Consumer spending rose a lessened 2.4% (-2.6% y/y) following a 41.0% Q3 rebound and a 33.2% Q2 decline. Durable goods spending eased 0.6% (+11.8% y/y) after gaining 82.7% in Q3. Nondurable goods spending slipped an increased 1.1% (+4.2% y/y) following a 31.1% gain. Outlays on services increased an unrevised 4.0% (-6.8% y/y) following a 38.0% Q3 rise.
Nonresidential fixed investment grew a little-revised 14.0% (-1.2% y/y) following a 22.9% rebound, after three quarters of decline. Building investment grew 1.1% (-14.5% y/y) which was slightly reduced. It followed four straight quarters of decline. Equipment investment surged more than one-quarter (3.5% y/y) after rising slightly more than two-thirds in Q3.
Residential investment increased by an upwardly revised 35.8% (14.1% y/y) following a two-thirds increase in Q3.
The 1.1% decline (-0.6% y/y) in government spending last quarter was slightly less than reported initially and followed a 4.8% drop. State and local government spending fell 1.2% (-2.4% y/y), the third consecutive quarterly shortfall. A 0.9% easing (+2.4% y/y) in federal government spending followed a 6.2% Q3 fall.
The 2.1% increase (1.3% y/y) in the GDP price index was revised up slightly. A 2.0% gain had been expected. The PCE price index gained 1.6% (1.2% y/y), roughly half the Q3 increase. The price index less food & energy was also unrevised at 1.4%, easing from 3.4% in Q3. The business fixed investment price index posted another weak increase, up 0.1% (0.5% y/y) and revised from 0.4%. The residential investment price index strengthened an upwardly revised 6.9% (4.9% y/y) after rising 9.5% and the government sector price index rose an unrevised 2.8% (1.3% y/y), about as it did in Q3.
The GDP figures can be found in Haver's USECON and USNA database. USNA contains virtually all of the Bureau of Economic Analysis' detail in the national accounts. Both databases include tables of the newly published not seasonally adjusted data. The Action Economics consensus estimates can be found in AS1REPNA.
| Chained 2012 $ (%, AR) | Q4'20 (2nd Estimate) | Q4'20 (1st Estimate) | Q3'20 | Q2'20 | Q4'20 Y/Y | 2020 | 2019 | 2018 |
|---|---|---|---|---|---|---|---|---|
| Gross Domestic Product | 4.1 | 4.0 | 33.4 | -31.4 | -2.4 | -3.5 | 2.2 | 3.0 |
| Inventory Effect (%-point) | 1.1 | 1.0 | 6.6 | -3.5 | -0.3 | -0.3 | 0.0 | 0.2 |
| Final Sales | 3.0 | 3.0 | 25.9 | -28.1 | -2.7 | -2.9 | 2.2 | 2.8 |
| Foreign Trade Effect (%-point) | -1.5 | -1.5 | -3.2 | 0.6 | -1.2 | -0.2 | -0.1 | -0.2 |
| Domestic Final Sales | 4.4 | 4.4 | 29.8 | -27.1 | -1.5 | -2.7 | 2.3 | 3.0 |
| Demand Components | ||||||||
| Personal Consumption Expenditure | 2.4 | 2.5 | 41.0 | -33.2 | -2.6 | -3.9 | 2.5 | 2.7 |
| Nonresidential Fixed Investment | 14.0 | 13.8 | 22.9 | -27.2 | -1.2 | -3.7 | 2.5 | 6.9 |
| Residential Investment | 35.8 | 33.5 | 63.0 | -35.5 | 14.1 | 4.2 | -0.1 | -0.6 |
| Government Spending | -1.1 | -1.2 | -4.8 | 2.5 | -0.6 | 0.4 | 3.0 | 1.8 |
| Chain-Type Price Index | ||||||||
| GDP | 2.1 | 2.0 | 3.5 | -1.8 | 1.3 | 1.2 | 1.8 | 2.4 |
| Personal Consumption Expenditure | 1.6 | 1.5 | 3.7 | -1.6 | 1.2 | 1.2 | 1.5 | 2.1 |
| Less Food & Energy | 1.4 | 1.4 | 3.4 | -0.8 | 1.4 | 2.4 | 1.7 | 2.0 |
| Nonresidential Investment | 0.1 | 0.4 | 0.1 | 0.8 | 0.5 | 0.5 | 1.3 | 0.9 |
| Residential Investment | 6.9 | 6.0 | 9.5 | 1.0 | 4.9 | 3.3 | 2.8 | 5.6 |
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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