US GDP Growth Revised Slightly Down to 2.5%

The US economy advanced an annualized 2.5 percent on quarter in the last three months of 2017, below an advance reading of 2.6 percent and 3.2 percent in the previous period. Figures came in line with market expectations. Imports rose more than exports and at the fastest pace since Q3 2010, bringing the net trade contribution to negative. Also, private inventory investment fell more than initially expected. On the other hand, personal spending remained robust and fixed investment growth was revised higher.

Personal consumption expenditure (PCE) contributed 2.58 percentage points to growth and rose 3.8 percent (the same as in the preliminary reading). Services rose more than anticipated (2.1 percent compared to 1.8 percent in the preliminary reading) while durables (13.8 percent compared to 14.2 percent) and nondurables (4.3 percent compared to 5.2 percent) increased less.

Fixed investment added 1.29 percentage points to growth (1.27 percentage points in the first estimate) and increased 8.1 percent (7.9 percent in the first estimate). Investment rose more than expected for residential (13 percent compared to 11.6 percent in the first estimate); structures (2.5 percent compared to 1.4 percent); equipment (11.8 percent compared to 11.4 percent). On the other hand, a further slowdown was seen for intellectual property products (2.4 percent compared to 4.5 percent). 

Private inventories subtracted 0.7 percentage points from growth, compared to -0.67 percent in the advance firgure. 

Meanwhile, exports jumped 7.1 percent (6.9 percent in the advance figure) and imports surged 14 percent (13.9 percent in the advance estimate). As a result, the impact from trade was -1.13 percent, the same as in the advance figure. 

Government spending and investment added 0.49 percentage points to growth (0.5 percentage points in the first estimate). It increased 2.9 percent, compared to 3 percent.

Considering full 2017, the economy expanded 2.3 percent, higher than 1.5 percent in 2016 and in line with the preliminary figures. 

 US GDP Growth Revised Slightly Down to 2.5%

BEA | Joana Taborda |
2/28/2018 2:09:09 PM