The first revision to fourth-quarter gross domestic product was 4.1%, vs. the prior reading of 4.0%, a bit better than the consensus forecast of 3.8%.
Personal consumption expenditures increased 2.7%, adding an extra point to the earlier reading, but lower than the third-quarter increase of 6.9%.
Non-residential fixed investment was raised to 9.6% from the earlier fouth-quarter reading of 6.9%. This was from a sharp upward revision to equipment and software, to 15.6% from 10% earlier.
The trade balance, revised downward, mitigated the report. Net exports went from positive to negative, pulling GDP down by 0.30% rather than boosting it by 0.19%, as first reported. This is going to be a persistent worry, says Informa Global Markets. The dollar has surely helped, but growth differentials still argue against much improvement in the trade balance for now.
Overall, this report is a positive surprise and should be seen as encouraging by financial markets, says Standard & Poor's.
Chicago PMI Improves
The Chicago PMI report continues to signal factory sector strength, coming in well above 50 and a bit above the median estimate. Orders and production remain very strong, while the employment index tacked on 6.5 points to clear 50 for the first time in 4 months.
The orders backlog index eased back, but remained well above 50 (at 54.4), so there are two components pointing toward better hiring, notes Informa Global Markets.
Consumer Sentiment Rises
University of Michigan consumer sentiment data for late February were a touch firmer than expected, with the headline index at 94.4, vs. a prior reading of 93.1 and a median estimate of 93.5. (Recall the early February reading was down over 10 points from the January level.)
The economic conditions index came in at 103.6 vs a prior 100.4, while the outlook index now stands at 88.5, vs. 88.4 at mid-month From Standard & Poor's MarketScope and Informa Global Markets