GDP Q4, 2009 revised down to 5.6% Growth rate

The last of the regular revisions of the quarterly GDP estimates for 2009 shows 5.6% GDP growth rate in 4Q 2009. That’s down from the 2nd revision’s estimate of 5.9%.  Not a big adjustment, but disturbing that the source of the adjustment is a downward revision in C and I.  C (represented as PCE-Personal Consumption Expenditures) in the table below and I (investment: the other three items) were weaker than previously thought. Not a good sign.  For a true, solid recovery we need those to get much stronger.  Prospects for a possible “double-dip” recession continue to be good.  I put it at even money.  Now is definitely not the time to be cutting back on G expenditures.

From  BEA via Calculated Risk:

The headline GDP number was revised down to 5.6% annualized growth in Q4 (from 5.9%). The following table shows the changes from the “advance estimate” to the “second estimate” to the “third estimate” for several key categories:

Advance Second Estimate Third Estimate
GDP 5.7% 5.9% 5.6%
PCE 2.0% 1.7% 1.6%
Residential Investment 5.7% 5.0% 3.8%
Structures -15.4% -13.9% -18.0%
Equipment & Software 13.3% 18.2% 19.0%

Note that PCE and Residential Investment (RI) – the two leading categories – were both revised down for Q4. This suggests that final demand was weaker in Q4 than in the previous two estimates.

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  1. Pingback: 4th quarter GDP grows at fastest pace in 1.5 years - Page 4 - Political Forum

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