The Bureau of Economic Analysis released their preliminary snapshot of US economic growth for the fourth quarter this morning. Simply put, this is the first revision to the Advance Estimate that printed one month ago. In one month’s time, we’ll get our second revision, or Final estimate, which in no way means that the figures can not be further revised at some later point in time should more information become available.
The headline estimate for annualized growth printed at 2.5%. That’s down from 3.2% for Q3 2017, and revised lower from 2.6% from the initial release. Sifting through the data, certain important items were left unrevised, such as Final Sales of Domestic Product, and Final Sales to Domestic Purchasers. Gross National Product, and Disposable Personal Income were also left alone.
There was one glaring (in my opinion) upward revision buried within the numbers. That would be Net Exports of Services. That particular item was revised all the way from -3.3% to -1.9%, forcing overall exports up from an initial 6.9% to 7.1%. Perhaps that weaker dollar is doing some good, at least fro this line item.
Several items sported downside revisions. The smart money looked for that kind of do-over for Personal Consumption Expenditures after the weaker than previously reported holiday season. Oh, there was weaker than previously reported growth for both Durable and Non-Durable Goods. However, better than previously reported results for Service sector kept consumption in place. Surprisingly, it was government spending at the Federal level in general, and defense spending is specific that were revised significantly lower than in that Advance release in late January. Come to think of it, a couple of my defense holdings (LMT, RTN) did run sideways from October through December.