Advertisement
Canada markets closed
  • S&P/TSX

    21,969.24
    +83.86 (+0.38%)
     
  • S&P 500

    5,099.96
    +51.54 (+1.02%)
     
  • DOW

    38,239.66
    +153.86 (+0.40%)
     
  • CAD/USD

    0.7316
    -0.0007 (-0.09%)
     
  • CRUDE OIL

    83.66
    +0.09 (+0.11%)
     
  • Bitcoin CAD

    87,631.88
    -953.30 (-1.08%)
     
  • CMC Crypto 200

    1,383.71
    -12.82 (-0.92%)
     
  • GOLD FUTURES

    2,349.60
    +7.10 (+0.30%)
     
  • RUSSELL 2000

    2,002.00
    +20.88 (+1.05%)
     
  • 10-Yr Bond

    4.6690
    -0.0370 (-0.79%)
     
  • NASDAQ

    15,927.90
    +316.14 (+2.03%)
     
  • VOLATILITY

    15.03
    -0.34 (-2.21%)
     
  • FTSE

    8,139.83
    +60.97 (+0.75%)
     
  • NIKKEI 225

    37,934.76
    +306.28 (+0.81%)
     
  • CAD/EUR

    0.6838
    +0.0017 (+0.25%)
     

No surprises from America

American flag child kid
American flag child kid

(Tom Pennington / Getty)

The third estimate for fourth quarter GDP showed that growth in the fourth quarter was 2.2%, as previously reported.

Expectations were for growth in the final quarter of last year to be revised up slightly, to 2.4% from a prior reading of 2.2%.

In 2014, real GDP increased 2.4%, up from 2.2% in 2013.

This report also showed that personal consumption rose 4.4% in the quarter, in-line with expectations and up from 4.2% previously.

Core PCE, a measure of inflation, rose 1.1% in the fourth quarter, as previously reported and expected.

The effect of the strong dollar was clearly on display in the final quarter of the year, taking a big dent out of corporate profits. Profits from current production decreased by $30.4 billion in the fourth quarter against an increase of $64.5 billion in the third. Domestic financial profits fell $12.5 billion in Q4, nonfinancial profits increased $18.1 billion, while the rest-of-the-world profits decreased by $36.1 billion.

ADVERTISEMENT

Here's the BEA on what drove the increase in real GDP, and what caused a deceleration in GDP growth:

The increase in real GDP in the fourth quarter reflected positive contributions from PCE,
nonresidential fixed investment, exports, state and local government spending, and residential fixed investment that were partly offset by negative contributions from federal government spending and private inventory investment. Imports, which are a subtraction in the calculation of GDP, increased.

The deceleration in real GDP growth in the fourth quarter primarily reflected an upturn in imports, a downturn in federal government spending, a deceleration in nonresidential fixed investment, and a larger decrease in private inventory investment that were partly offset by accelerations in PCE and in state and local government spending.

In a note following the report, Bricklin Dwyer at BNP Paribas said, "Today’s GDP report reiterates what the FOMC already knows: the economy was on solid footing at the end of the year, while inflation and inflation expectations continue to ratchet lower than expected."



More From Business Insider