At 8:30 this morning, we'll get our first look at fourth quarter GDP growth. Consensus is for something like 3.0-3.2%, up from 1.8% in the third quarter. That would be the swiftest growth in 6 quarters and I tend to think it's a stretch, at least upon the inevitable one or two downward revisions to today's estimate that we'll see 30 and 60 days from now.
Today, we could see a number as high as 3.0%, I suppose, but probably only if noisy seasonality and inventory build up help drag it over the line.
Deutsche Bank chief U.S. economist Joseph LaVorgna said in the fourth quarter GDP report, inventories are expected to be a substantial contributor to output, meaning any slowing in the rate of inventory build would weigh on production and first quarter GDP.
LaVorgna said he expects inventories in the GDP report to have expanded at a $45 billion annualized pace in the fourth quarter, compared to the surprise $2 billion decline in the third quarter. This would be the largest increase since the first quarter of 2011.
Since we're here, let's reach into thin air and pull down the prediction of... 2.8%.
The U.S. economy grew 2.8% in the final three months of 2011, propelled by increases in consumer spending and business inventories, according to a preliminary government estimate.
The inventory build will likely rob a couple tenths of a point from 1st quarter growth (and again, this first look will probably get ratcheted down in subsequent revisions), so enjoy this sub-long-term-potential high water mark while it lasts.
Handcrafted by Flip on January 27, 2012 |
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