Seeing US GDP for Q-4 Being Revised Upward
US economic growth for Q-4 Y 2017 is likely to be revised upward after data Thursday indicated more spending on services than previously estimated by the government.
The Commerce Department’s quarterly services survey, or QSS, added to December data on construction spending and manufacturers inventories in suggesting that gross domestic product grew much faster than the 2.5% annualized rate reported by the government in its 2nd estimate last month.
Before the QSS data, economists had expected that GDP growth for the October-December quarter would be raised to about a 2.6% rate.
Some now expect Q-4 GDP growth would be revised up to a 2.9% rate when the Commerce Department’s statistics agency, the Bureau of Economic Analysis, incorporates the data into its 3rd estimate to be published later this month.
“The QSS points to stronger services spending in the fourth quarter than the BEA had previously estimated,” said an economist at JPMorgan.
“And while the QSS often impacts health care categories within the spending data, we think that much of the expected fourth-quarter upward revision will be related to spending on motor vehicle maintenance and repair.”
The QSS data pointed to a modest downward revision to investment in IP (intellectual property) products.
Spending on intellectual property products was previously reported to have increased at a 2.4% rate in Q-4.