So the advanced estimate for 4Q GDP came out higher than people thought — at 5.7%. Remember that the 3Q number was originally 3.5% but revised down to 2.2%. As BEA notes in the beginning of the release, “The Bureau emphasized that the fourth-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency.” One of the biggest sources of a revision many be the trade data. The advanced estimate notes that part of the improved GDP was due to “a deceleration in imports.” That was true in October. But imports surged in November (see earlier posting). And we do not have December’s data.
So don’t break out the bubbly yet. It may not be as good as it sounds. And, as was noted in today’s New York Times story:
“It was an excellent report, but it’s not clear how sustainable this pace of growth is,” said John Ryding, chief economist at RDQ Economics. “We need numbers like this for the next two years, and I just don’t think we can achieve that.”
We still have a lot of work ahead creating a path to sustainable and shared economic prosperity.