BEA Revision Revises 4th Quarter 2016 GDP Growth Upward To 2.08 - Thursday, March 30
In their third and final estimate of the US GDP for the fourth quarter of 2016, the Bureau of Economic Analysis (BEA) reported that the US economy was growing at a +2.08% annual rate, up slightly from the +1.85% previously reported but down by -1.45% from the prior quarter.
The improvement in the reported growth came primarily from increased consumer spending on services, with smaller increases in consumer goods spending and inventories also boosting the headline number. Offsetting those increases were continued weakening in commercial fixed investment, governmental spending and foreign trade.
The BEA's "bottom line" (their "Real Final Sales of Domestic Product", which excludes the growing inventories) grew slightly to +1.07%, although it remained down nearly 2% (-1.97%) from 3Q-2016.
Real annualized household disposable income was reported to have grown by $123 quarter-to-quarter, to an annualized $39,477 (in 2009 dollars). The household savings rate weakened slightly to 5.5%.
For the fourth quarter the BEA assumed an effective annualized deflator of 2.10%. During the same quarter (October 2016 through December 2016) the inflation recorded by the Bureau of Labor Statistics (BLS) in their CPI-U index was 3.05%. Under estimating inflation results in correspondingly over-optimistic growth rates, and if the BEA's "nominal" data was deflated using CPI-U inflation information the headline growth number would have been at a +1.17% annualized growth rate.
Among the notable items in the report :