GDP:  Slow End to Q4 Suggests Slow Start to Q1

March 28, 2019
Bottom Line: Economic activity was weaker in 2018 Q4-18 than previously reported with sharp downward revisions to consumption. Because this revision was largely due to new December data, this suggests that the quarter ended weaker. 2019 Q1 ends this weekend, the data released so far for January, February and early March suggest that 2019 Q1 economic activity grew at a slower pace than in Q4-18; many early estimates are between 1.3% and 1.6%. GDP was REVISED LOWER by 0.4 percentage points to 2.2% in this third estimate for 2018 4th Quarter. This compared with market expectations for a downward revision to 2.3%. Economic activity is now 3.0% above its year ago level. In final sales categories, net exports,and exports were revised higher, while residential investment, government purchases, fixed investment, imports and consumption were revised lower. As a result of all of these changes, real final sales was revised up by 1.1 percentage points to 2.1% while real domestic demand was revised down by 0.8 percentage points to 2.1%. The GDP Price Index was REVISED LOWER by 0.11 points to 1.7%, compared with market expectations of 1.8%. Economy-wide prices are now 2.1% ABOVE year ago levels.