**MNI: 5 Things We Learned From Advance Fourth Qtr GDP Data>

By Kevin Kastner, Holly Stokes, and Sara Haire

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

advance fourth quarter GDP data released Friday by the Bureau of 

Economic Analysis: 

     - Real GDP dipped below 3% in the fourth quarter, stopping the 

string of two consecutive quarters above 3%, though the data could be 

revised up next month. Despite the slowdown, growth remains solid to 

finish 2017 well ahead of 2016 pace of growth. 

     - The 2.6% GDP rise was below the 3.0% gain expected and the 3.2% 

third quarter rise, with slower inventory growth and a wider net export 

gap accounting for the deceleration of growth. 

     - Offsetting the negative contributions was a sharp increase in PCE 

(+3.8% gain, +2.58pp contribution vs +1.49pp in 3Q). In addition, 

residential fixed investment turned up in the fourth quarter, and 

nonresidential investment and government spending posted larger gains. 

     - The chain price index rose 2.4% in the fourth quarter, only 

slightly ahead of expectations. The closely-watched core PCE price index 

rose 1.9% after a 1.3% gain in the third quarter, allowing the year/year 

rate to tick back up to +1.5% after dipping to +1.4% in previous quarter, 

but was still down from +1.8% pace seen at the end of last year. 

     - The fourth quarter increase, while possibly revised with the 

second estimate for the quarter next month, puts full-year 2017 GDP 

growth at +2.3% after +1.5% in 2016 and was up 2.5% when compared fourth 

quarter to fourth quarter. 

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

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