Spending Quicker, Inflation Warmer, US GDP Revisions Show

Inflation was a little warmer, spending a little quicker and overall growth a little slower in Q4, meaningless revisions to US GDP data released on Wednesday showed.

A tenth of a point isn’t going to matter for anyone’s narrative either way. If your macro outlook has shifted because the BEA now says Q4 growth was 3.2% instead of 3.3% and/or because the same second estimate suggests core inflation ran at 2.1% QoQ instead of 2% as originally reported, well then you’re a silly person.

I suppose that makes me a silly person for wasting time highlighting these revisions, but what can you do, right?

Recall that markets were pretty pleased to learn that quarterly core price growth was on-target for a second straight three-month period in Q4. Nobody’s going to be leaping off any bridges Wednesday just because that figure is now a tick warmer than it was. Note also that the headline price gauge was likewise revised up by 0.1ppt.

More notable (barely) than the minor tweaks to the headline growth print and the price indexes was a two-tenths (gasp) revision to the personal consumption reading.

So, that figure is now 3% compared to 2.8% as initially reported.

The pace of consumer spending was basically unchanged in Q4 versus Q3.

What’s the takeaway? What to make of it all?! Nothing. You should absolutely just go on about your day without thinking twice about these revisions.

But, if you don’t have that luxury — if you’re chained to a $30,000 piece of equipment and the overlords 10 floors up demand you extract meaning from the meaningless or worse, wager money on it — then the read-through is that spending was brisker than initially thought in Q4, and that was accompanied by, and probably contributed to, an inflation impulse that was commensurately warmer than the BEA originally reported.

Do with that as you will. And for God’s sake, man: If you’ve made enough money chained to that terminal that you can get out of the business, do it. Life as a professional flâneur is eminently more rewarding.


 

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