US: Expect headline Q4 GDP to be revised up to 2.0% - Nomura

Analysts at Nomura note that in the advance estimate, the Bureau of Economic Analysis (BEA) reported that the US real GDP grew at an annualized rate of 1.9% q-o-q in Q4, slowing from the 3.5% increase in Q3.

Key Quotes

“The initial estimate, with the exception of a stronger-than-expected contribution from inventory investment, was mostly in line with expectations. Fixed investment and non-residential and residential investment contributed strongly to growth, although non-residential structure investment was weaker than expected.”

“Incoming data since the initial estimate suggest real GDP growth may be revised up in the second estimate. Although private fixed investment in residential and non-residential structures in Q4 was likely stronger than the BEA previously estimated, government spending was probably slightly weaker. Furthermore, the advance release of Quarterly Services Survey suggests stronger spending on services in Q4. All in all, we expect headline Q4 GDP to be revised up to 2.0% from 1.9% (Consensus: 2.1%).”