THE BASIS POINT

GDP down but Consumer Component Strong.

 

GDP (4thQ2014)

– Real GDP quarter/quarter (seasonally adjusted, annualized) +2.6%. Previous was +5.0%
– GDP price index -quarter/quarter (seasonally adjusted, annualized) +0.0%. Previous was +1.4%.

The +2.6% growth is in line with expectations as opposed to the “what the heck was this” +5.0% of the 3rd quarter.

Consumer Spending was up and that is a healthy sign for the economy.

This is the initial release of 4thQ22014 GDP and, except for consumer spending, the other GDP components have 2 months of data and 1 month of guessing.

To me, the fact that Consumer Confidence is enormous and Consumer Spending is up are more important than the dip in GDP.

 

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