by Bill McBride on 2/26/2010 08:30:00 AM
Friday, February 26, 2010
The headline GDP number was revised up to 5.9% annualized growth in Q4 (from 5.7%), however most of the improvement in the revision came from changes in private inventories. Excluding inventory changes, GDP would have been revised down to around 1.9% from 2.2%.
This table shows the changes from the "advance estimate" to the "second estimate" for several key categories:
| ||Advance||Second Estimate|
|Equipment & Software||13.3%||18.2%|
Changes in private inventories are transitory (only lasts a few quarters at the start of a recovery), and although the headline number was revised up, final demand was weaker than in the advance estimate.