Real GDP growth during Q4 2014 was revised down to 2.2% (2.4% y/y) from the advance estimate of a 2.6% gain. The increase compared to an expected 2.1% rise in the Action Economics Forecast Survey. During all of last year, real GDP expanded 2.4%, up from 2.2% and 2.3% during the prior two years.

A lessened degree of inventory accumulation accounted for much of the revision to last quarter's economic growth. The 0.1 percentage point addition was revised from a 0.8 percentage point addition estimated initially and compared to roughly zero in Q3'14. Deterioration in the foreign trade deficit subtracted an additional 1.2 percentage points from economic growth compared to 1.0 points estimated last month. Exports grew 3.2% (2.1 y/y) while imports jumped 10.1% (5.5% y/y).

Growth in domestic final demand was strengthened to 3.2% (2.8% y/y) from 2.8%. Improved growth in business fixed investment of 4.8% (6.2 y/y), versus 1.9% estimated last month, accounted for the gain. Investment in information processing equipment grew 20.2% (6.9% y/y) but growth in industrial equipment fell 15.0% (+12.0% y/y). Investment in intellectual property products increased 9.1% (7.7% y/y). Business investment accounted for 0.6 percentage points of GDP's increase last quarter. A lessened decline in government spending of 1.8%, versus 2.2% estimated originally, also helped GDP growth. National defense spending fell 12.5% (-0.4% y/y).

The 4.2% increase in consumer spending was little-changed and it added 2.8 percentage points to the GDP advance. Services spending grew 4.1% (2.2% y/y), the largest rise since Q2 2000. Food services paced the advance with a 7.1% increase (4.0% y/y). Spending on durable goods grew 6.0% (8.0% y/y) led by a 9.2% rise (10.3% y/y) in recreational goods & vehicles. Nondurable goods spending rose 3.8% (2.1% y/y), paced by a 9.4% jump (3.0% y/y) in apparel. Purchases at restaurants fell 0.7% (-0.8% y/y), down for the fourth straight quarter. Residential investment spending growth was reduced to 3.3% (2.4% y/y) and it equaled the Q3 increase.

The GDP chain price index edged 0.1% higher (1.2% y/y), little revised from the advance estimate. The personal consumption price index fell 0.4% (+1.1% y/y) but it rose 1.1% (1.4% y/y) excluding food & energy. The business fixed investment price index gained 0.2% (1.0% y/y), held back by a 1.6% decline (+0.3% y/y) in intellectual property product prices. The residential investment price index gained 4.5% (5.2% y/y).

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 in the national accounts, including the integrated economic accounts and the recently added GDP data for U.S. Territories. The Action Economics consensus estimates can be found in AS1REPNA.

How Should the Fed Interpret Slow Wage Growth? from the Federal Reserve Bank of Richmond is available here.