GDP slows to 2.1% in 4th Quarter

4 GDP-Adv.
Updated: 30-Jan-20 09:19 ET


  • Real GDP increased at a seasonally adjusted annual rate of 2.1% in the fourth quarter ( consensus 1.8%), which was unchanged from the third quarter. 
  • The GDP Price Deflator was up just 1.4% ( consensus 1.8%) after increasing 1.8% in the third quarter. 

Key Factors

  • PCE growth was 1.8% in Q4 and contributed 1.2 percentage points to the change in real GDP. 
  • Gross private domestic investment was down 6.1% in Q4. Nonresidential investment was down 1.5% and residential investment was up 5.8%. The change in private inventories subtracted 1.09 percentage points from the change in real GDP. 
  • Exports were up 1.4% in Q4 while imports were down 8.7%. Net exports contributed 1.48 percentage points to the change in real GDP. 
  • Government spending was up 2.7% in Q4 and added 0.47 percentage points to the change in real GDP. 

Big Picture

  • Personal consumption expenditure growth was a bit disappointing at 1.8% for the fourth quarter, yet the key takeaway from the report was that real final sales of domestic product, which excludes the change in inventories, was up a solid 3.2% — the highest growth rate since Q2 2018 and above the prior 10-quarter average of 2.5%. 
  • All in all, the Advance Q4 GDP estimate painted a picture of an economy running at a moderate growth pace with subdued inflation. 
Inventories (change)$6.5B$69.4B$69.4B$116.0B$93.0B
Final Sales3.2%2.1%3.0%2.6%1.0%
Nonresidential Inv.-1.5%-2.3%-1.0%4.4%4.8%
Intellectual Property5.9%4.7%3.6%10.8%11.7%
Residential Inv.5.8%4.6%-3.0%-1.0%-4.7%
Net Exports-$902.0B-$990.1B-$980.7B-$944.0B-$983.0B
GDP Price Index1.4%1.8%2.4%1.1%1.6%

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