US: Upside surprise in Q4 GDP – Nomura

According to the BEA’s final report, US real GDP grew at 2.9% q-o-q saar in Q4, revised up from 2.5%, and above expectations (Nomura and Consensus: 2.7%), notes the research team at Nomura.

Key Quotes

“The upside surprise can be attributed to a solid upward revision to growth in personal consumption expenditures (PCE). PCE growth was revised up by 0.2pp to 4.0% on upward revisions to spending on nondurable goods and services. Revisions to other components were mostly in line with our expectations. With real final sales at 3.4%, Q4 growth was solid. The final estimate of GDI came in at 0.9%, slightly below previous quarters. The average of GDP and GDI rose at 1.9% q-o-q saar, following 2.8% in the previous quarter.”

“GDP tracking update: Data released today were, on net, positive and led us to raise our Q1 real GDP tracking estimate by 0.1pp to 1.8% q-o-q saar. The components of Q4 GDP were mostly in line with our expectations and did not have a material impact on our Q1 GDP tracking estimate. The advance report from the Census Bureau indicated a widerthan-expected goods trade deficit in February, implying more drag from net exports in Q1. However, stronger-than-expected wholesale inventory accumulation implies a stronger contribution from inventory buildup in Q1, more than offsetting the increased drag from net exports. Finally, pending home sales rebounded strongly in February, a leading indicator of existing home sales, pointing to slightly more robust growth in brokers’ commissions in Q1.”