GDP: Modest Upward Revisions, Strong 4Q17

Bottom Line: The third revision of 4th Quarter 2017 GDP showed growth was even higher than previously reported. Consumer spending was revised higher, as was business fixed investment. Of course, this is old news given that the 1st Quarter ends on Saturday. Early estimates are for another solid quarter -- Bloomberg consensus estimate of 61 economists is 2.5%, Atlanta Fed's GDPNow model is at 1.79% and the New York Fed's Nowcast is at 2.85%. GDP was REVISED HIGHER by 0.4 percentage points to 2.9% in this third estimate for 2017 4th Quarter. This compared with market expectations for an upward revision to 2.7%. Economic activity is now 2.6% above its year ago level. In final sales categories, consumption, fixed investment, imports, and government purchases were revised higher while net exports, and residential investment were revised lower. As a result of all of these changes, real final sales was revised up by 0.2 percentage points to 3.4% while real domestic demand was revised up by 0.2 percentage points to 4.5%. The GDP Price Index was REVISED UP by 0.01 points to 2.3%, compared with market expectations no change at 2.3%. Economy-wide prices are now 1.9% ABOVE year ago levels.