America beats expectations

The US economy grew more than we thought at the end of last year, with consumers in the driver’s seat.

The third and final estimate of gross-domestic-product growth for the fourth quarter was 1.4%, according to a Commerce Department release Friday.

This was higher than the 1% annualized pace that was reported in the second estimate and that was expected by economists.

The report showed that consumer spending continued to propel the economy, while exports and local government spending fell.

Personal consumption grew 2.4%, higher than the 2% gain earlier reported.

Core personal consumption expenditures, a gauge of individual spending, were up 1.3%, a pace of growth unchanged from the second estimate.

This release also had the first snapshot of corporate profits in the fourth quarter. Adjusted, pretax profits fell at a 7.8% annual rate. This put them down 3.1% in 2015, their biggest decline since 2008, partly due to the oil crash and higher labour costs.

A big Q4 decline had been expected, but the catch was a $20.8 billion penalty that BP paid over the 2010 oil spill in the Gulf of Mexico. The company reported its biggest annual loss in two decades.

And so even though falling corporate profits are a recession signal for some, “a lot of the decline in profits comes from energy,” said Gus Faucher, PNC deputy chief economist. “Outside of energy, the picture looks a lot different.”

This was about the only thing happening in markets and economics on Friday, as traders took time out for Good Friday.

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