Dollars and Jens
Wednesday, February 28, 2007
The Bureau of Economic Analysis made its second guess as to Q4 GDP growth, and it's a 2.2% annual rate, down from the first guess of 3.5%, but around where people expected it to be revised to after some trade and inventory numbers came out in the past month. GDP-ex-fixed-residential-investment, with today's data, looks to have stuck uncannily close to 31/4% for the past three quarters, suggesting that we still aren't getting a clear sign of spill-over from the housing sector into broader weakness. Perhaps more promising, inventory reduction took even more out of GDP than did the housing slowdown, and that tends to precede increases in manufacturing activity as inventory has to be replaced. On the whole, it looks about as good as a 2.2% report can.

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