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.