GDP in USA

USA - GDP (billions of U.S. Dollars)

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.

The Federal Reserve projects economic growth of 2.0% in 2020 and 1.9% in 2021. FocusEconomics Consensus Forecast panelists, meanwhile, see GDP expanding 1.8% in 2020, which is unchanged from last month’s estimate, and 1.8% again in 2021.