4Q20 GDP Adv

 Mostly just collecting data that we already know, but:

  • Q4 GDP (initial estimate): +4.0% annualized vs. +4.1% estimate and +33.4% in Q3.
  • US Personal Consumption: 2.5% (est 3.1%; prev 41.0%)
  • The economic recovery continues at a much slower rate vs. Q3 as new restrictions were imposed when the virus resurged.
  • Exports, nonresidential fixed investment, personal consumption expenditures, residential fixed investment, and private inventory investment rose, while the federal government and state and local governments reduced spending and imports increased.
  • PCE price index +1.5% vs. +2.4% consensus and 3.7% in previous quarter.
  • Core PCE prices +1.4% vs. +1.5% consensus and 3.4% in previous quarter.


GDP comes in a little weak as personal consumption, while positive, comes in light. Overall, the increase in GDP reflected increases in exports, nonresidential fixed investment, personal consumption expenditures (PCE), residential fixed investment, and private inventory investment that were partly offset by decreases in state and local government spending and federal government spending.  The increase in PCE was more than accounted for by spending on services (led by health care); spending on goods decreased (led by food and beverages). The increase in residential fixed investment primarily reflected investment in new single-family housing.

Personal income decreased due to decreases in transfer payments and sole-proprietor income while wages and salaries increased (as we know from earlier reports).  Specifically income decreased $339.7 billion, compared with a decrease of $541.5 billion in the third quarter due to decreases in personal current transfer receipts (notably, government social benefits related to the winding down of CARES Act pandemic relief programs) and proprietors' income that were partly offset by increases in compensation and personal income receipts on assets.

Disposable personal income decreased $372.5 billion, or 8.1 percent, compared with a decrease of $638.9 billion, or 13.2 percent, in the third quarter. 

Personal savings was $2.33 trillion in the fourth quarter, compared with $2.83 trillion in the third quarter. The personal saving rate—personal saving as a percentage of disposable personal income—was 13.4 percent in the fourth quarter, compared with 16.0 percent in the third quarter. 

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