**MNI 5 Things: US 4Q GDP Revised Modestly Higher To +2.9%>

--5 Things We Learned From The Third Estimate of 4Q GDP

By Kevin Kastner, Sara Haire, and Holly Stokes

     WASHINGTON (MNI) - The following are the key points from the 

third estimate of fourth quarter GDP data released Wednesday by the 

Bureau of Economic Analysis: 

     - Fourth quarter GDP was revised higher to +2.9% SAAR vs +2.7% 

expected, from +2.5% in the second estimate, but since there were 

no meaningful revisions to the prices data, the report will likely draw 

little market reaction. Looking ahead, analysts expect slower growth in 

the first quarter, as usual, followed by a rebound in the second 

quarter. 

     - The upward adjustment to headline GDP reflected upward revisions 

to PCE, inventories, nonresidential fixed investment, and government 

spending. Providing some offset, residential fixed investment growth was 

revised lower and the net export gap is now reported modestly wider than 

in the second estimate. 

     - The PCE measure was revised up to a 4.0% gain, reflecting upward 

adjustment to nondurable goods and services spending that offset a 

downward revision to durable goods spending. The savings rate was 

revised down to 2.6% from 2.7% in the second estimate, so it is now even 

further below the 3.4% rate in 3Q. 

     - The prices measures were generally unrevised, with the GDP price 

index still +2.3%, the gross domestic purchases price index still +2.5%, 

and the closely watched core PCE price index unrevised at +1.9%, keeping 

the y/y rate for that measure at +1.5%, slightly ahead of +1.4% in 3Q. 

     - Real final sales of domestic product were revised up to +3.4% vs 

+3.3% in second estimate, reflecting the upward adjustment to most 

components. Final sales to domestic purchasers were revised up to +4.5% 

from +4.3%. Real GDI was +0.9% vs +2.4% in 3Q, while the GDP/GDP average 

slowed to +1.9% vs +2.8% in the previous quarter. 

     ** MNI Washington Bureau: 202-371-2121 ** 

[TOPICS: MAUDS$,M$U$$$,MAUDR$]