United States: 2nd GDP release confirms stable growth in Q4 2019
Economic growth was stable in the fourth quarter from the third, with GDP growth again clocking in at 2.1% in seasonally-adjusted annualized terms (SAAR), according to a second GDP estimate released by the Bureau of Economic Analysis. In annual terms, GDP grew 2.3% in Q4, down from Q3’s 2.1% expansion.
Delving into the details, the composition of growth was largely unchanged in the second estimate. Private consumption slowed more than initially reported (Q4: +1.7% SAAR; previously reported: +1.8% SAAR; Q3: +3.2% SAAR). Government outlays, however, remained healthy in Q4 even though the expansion was revised down slightly to 2.6% (previously reported: +2.7% SAAR) on downward revisions to state and local government spending. Meanwhile, the decline in non-residential business investment was worse than initially expected and was on par with Q3’s contraction (Q4: -2.3% SAAR; previously reported: -1.5% SAAR).
The GDP data revision demonstrated the external sector did better than initially projected, as growth in exports of goods and services was revised up to 2.0% SAAR for Q4 (previously reported: +1.4% SAAR). Meanwhile, the plunge in imports of goods and services remained the sharpest since Q2 2009, although was a notch softer than reported in the advance release. As a result, the external sector added 1.5 percentage points to headline growth (Q3: -0.1 percentage points), marking the largest contribution to growth in over a decade.