Q4 GDP (Final): Modest Upward Revision

Bottom Line: Economic activity in 2015 Q4 was revised upward by 0.4% to 1.4%. Because this revision was largely due to new December data, this suggests that the quarter ended better than previously reported as consumption increased by 0.4% to 2.4%. Economic activity is now a modest 2.0% above its year ago level and 9.8% above its previous peak level in 2007 Q4. 2016 Q1 ends next week; the data released so far for January, February and early March suggest that 2016 Q1 economic activity grew at a faster pace than in Q1; many early estimates are between 2.0% to 2.5%. GDP was REVISED HIGHER by 0.4 percentage points to 1.4% in this third estimate for 2015 Q4, compared with market expectations for no change at 1.0%. Economic activity is now 2.0% above its year ago level. In final sales categories, net exports, residential investment, exports, consumption and government purchases were revised higher while fixed investment and imports were revised lower. As a result of all of these changes, real final sales was revised up by 0.5 percentage points to 1.6% while real domestic demand was unchanged at 1.4%. The GDP Price Index was UNCHANGED at 0.9%, in line with market expectations. Economy-wide prices are now 1.1% ABOVE year ago levels. Economy-wide inflation hit a cyclical peak of 3.4% in 2006 Q2 and reached a cyclical nadir of 0.2% in 2009 Q3.