Global| Mar 30 2005US GDP Growth Unrevised, Corporate Profits Firm
by:Tom Moeller
|in:Economy in Brief
Summary
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 [...]
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% |
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.
