2017 Economic Calendar
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Released On 3/30/2017 8:30:00 AM For Q4(f):2016
PriorConsensusConsensus RangeActual
Real GDP - Q/Q change - SAAR1.9 %2.0 %1.9 % to 2.0 %2.1 %
GDP price index - Q/Q change - SAAR2.0 %2.0 %2.0 % to 2.0 %2.1 %
Real Consumer Spending – Q/Q change – SAAR3.0 %2.9 % to 3.1 %3.5 %

An upgrade for consumer spending gives a boost to the third estimate for fourth-quarter GDP, now at 2.1 percent annualized growth vs 1.9 percent in the second estimate. Consumer spending rose at a 3.5 percent pace in the quarter, vs the Econoday consensus for 3.0 percent which was the rate in the prior estimate. The rise reflects upward revisions for service spending, now at 2.4 percent vs an initial 1.8 percent, and nondurables, now at 3.3 percent vs 2.8 percent. Spending on durables, reflecting the quarter's strong vehicle sales, rose at an 11.4 percent rate for a 1 tenth decrease from the prior estimate.

A negative in the report is a $3.4 billion upward revision to inventory accumulation, now at $49.6 billion in the quarter. This adds to GDP but is a reminder that heavy inventories may be slowing down first-quarter output. Another negative is a $5.4 billion widening in the net export revision to a negative $605.0 billion, reflecting a sharper decrease for exports together with higher imports.

Nonresidential fixed investment is downgraded to 0.9 percent from 1.3 percent with residential investment steady at a strong 9.6 percent that ended two prior quarters of contraction. The government component is downgraded to 0.2 percent from 0.4 percent.

The GDP price index is also revised, up 1 tenth from the prior estimate to 2.1 percent with the core, which excludes food and energy, also up 1 tenth to 1.8 percent.

The first quarter isn't showing the same level of consumer spending that the fourth quarter did, at least on vehicles. Watch tomorrow for the personal income & outlays report which will offer new data on February.

Consensus Outlook
The third estimate of fourth-quarter GDP is expected to come in at a consensus 2.0 percent annualized pace, up from 1.9 percent in the first two estimates. A rise in inventories was an unwanted plus in the quarter while net exports were decidedly weak. Consumer spending got an upgrade in the second estimate to a 3.0 percent annualized pace where forecasters expect it to hold. The GDP price index is expected to remain at 2.0 percent in lagging confirmation that the Federal Reserve's price targets are being met.

Gross Domestic Product represents the total value of the country's production during the period and consists of the purchases of domestically-produced goods and services by individuals, businesses, foreigners and government entities. Data are available in nominal and real (inflation-adjusted) dollars, as well as in index form. Economists and market players always monitor the real growth rates generated by the GDP quantity index or the real dollar value. The quantity index measures inflation-adjusted activity, but we are more accustomed to looking at dollar values.

Household purchases are counted in personal consumption expenditures -- durable goods (such as furniture and cars), nondurable goods (such as clothing and food) and services (such as banking, education and transportation). Private housing purchases are classified as residential investment. Businesses invest in nonresidential structures, durable equipment and computer software. Inventories at all stages of production are counted as investment. Only inventory changes, not levels, are added to GDP.

Net exports equal the sum of exports less imports. Exports are the purchases by foreigners of goods and services produced in the United States. Imports represent domestic purchases of foreign-produced goods and services and must be deducted from the calculation of GDP. Government purchases of goods and services are the compensation of government employees and purchases from businesses and abroad. Data show the portion attributed to consumption and investment. Government outlays for transfer payments or interest payments are not included in GDP.

The GDP price index is a comprehensive indicator of inflation. It is typically lower than the consumer price index because investment goods (which are in the GDP price index but not the CPI) tend to have lower rates of inflation than consumer goods and services. Note that contributions of each component, as averaged over the prior year, are tracked in the table below (components do not exactly sum to total due to chain-weighted methodology). Consumption expenditures, otherwise known as consumer spending, has over history been steadily making up an increasing share of GDP.  Why Investors Care
Real GDP growth is always quoted at a quarterly annual rate. It measures how much the economy has grown over a three-month period. Quarterly growth rates are often volatile consequently, economists also like to look at the year-over-year growth in GDP. The yearly changes tend to be more stable.
Data Source: Haver Analytics
It is common to compare quarterly changes at annual rates in the GDP deflator. These can be volatile, just like the quarterly swings in real GDP growth as a result, the trend in inflation is better determined by year- over- year changes.
Data Source: Haver Analytics

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