MNI DATA IMPACT: 2018 GDP Unrev At +2.9%, But Softer Q4 Growth

By Kevin Kastner

     WASHINGTON (MNI) - Armed with updated source data and changes to

methodology, the U.S. Bureau of Economic Analysis Friday released revised

estimates for GDP as part of their annual revision. 

     The revisions resulted in no substantial change to the overall growth

picture over the last several years, but a few interesting facts do emerge. The

data was released at the same time as the second quarter advance estimate and

the revised first quarter data. 

     Here are some key points from the revisions through the end of 2018: 

     - While 2018 full-year GDP was unrevised at a 2.9% rate of growth from

2017, there were downward revisions to the last three quarters of the year that

showed a slower pace of growth going into 2019. The result was a large downward

revision to the Q418/Q417 measure to a 2.5% gain from the previously reported

3.0% rise. 

     - Fourth quarter GDP was revised down by more than a full percentage point

to 1.1% from the 2.2% rate previously reported, with a sharp downward revision

to the PCE the key factor (now +1.4% vs prev +2.5%). Additionally, third quarter

growth was revised down by 0.5 percentage point to 2.9%, while growth in the

second quarter was revised down by 0.7 percentage point to 3.5%. First quarter

growth was revised up to 2.5% from 2.2%.

     - Core PCE prices were unrevised at a 1.9% gain for 2018, both for the full

year and Q4/Q4 measures. Fourth quarter core prices were revised down slightly

to a 1.7% gain from the previous quarter from the previously reported 1.8% rise.

     - The alternative measure of Gross Domestic Investment was revised up to a

2.5% rate for 2018 from the previously reported 2.3% gain, so the GDP/GDI

average was revised up slightly to 2.7% from the previously reported 2.6% gain.

     - The savings rate was revised up sharply in 2018 to 7.7% from 6.7% and in

2017 to 7.0% from 6.7% previously. Three were upward revisions in every quarter

from Q217 to Q418, most substantially in the more recent quarters. 

     - Going back further, 2017 GDP was revised up to a 2.4% rate from the 2.2%

gain previously reported, but GDP was unrevised at their previously announced

rates for 2014, 2015, and 2016. Over that period, the average rates of growth by

quarter were revised up for the first, third, and fourth quarters and down for

the second quarter. The data suggest a continued effort to resolve issues with

residual seasonality.

     - For the years under revision (2014-2018), the average rate of annual

growth was revised up slightly to 2.5% from 2.4%, while the GDI was revised up

to 2.3% from 2.2%, putting the average of the two at 2.4% over the five-year

revision period. The average annual rate of growth over the recovery period from

2009 remained at 2.3%. 

--MNI Washington Bureau; tel: +1 202-371-2121; email: kevin.kastner@marketnews.com

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