Yes, A GDP Upward Revision Can Still Disappoint

Although some might look at a an upward GDP revision as a positive economic signal, in this case, looking deeper into the numbers, it’s clear it’s not.

The upward revision to real GDP is the result of US companies paring 4Q inventories by $16.9 billion, revised from $33.5 billion. That masked weakness in demand, as Real final sales, which is GDP less the change in inventories, increased at an annual rate of 1.9% in 4Q, down from previous estimate of 2.2%.

The real weakness here was the fall in consumer spending.

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