Q4 GDP Misses Expectations, But Internals Are Very Strong

The number:

3.2% is a bit behind expectations.

On the other hand, consumption/end demand was pretty strong.

Real final sales of domestic product — GDP less change in private inventories — increased 7.1 per cent in the fourth quarter, compared with an increase of 0.9 per cent in the third.

The employment cost index jump of 0.4%.

Stocks are still higher after the news. Bottom line. Not amazing, but not that bad, especially when you look into the internals.

The full release is here.

Background: Here we go with the first look at Q4 GDP. Analysts are looking for growth of 3.5-3.7%, which is well up from the 2.6% we saw last quarter.

Of course, a lot of interested will be paid to the internals, especially how much of the number came from end demand vs. inventories, etc.

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