Economic Wrap: GDP Q4 was a miss - Westpac

Analysts at Westpac offered an economic wrap.

Key Quotes:

"US GDP for Q4 was on the weaker side of expectations although most of the miss was attributable to net exports - they subtracted a chunky 1.7ppts from growth. Elsewhere the detail is mostly encouraging - personal spending added +1.7ppts, business investment chipped in with a +0.3ppt addition to growth (the best in nearly 2yrs) and housing investment also added +0.4ppts, the highest in a year. Private domestic demand, a better gauge of growth, came in at a decent 2.8%, broadly in line with the Fed's expectations of moderate growth. Durable goods orders fell 0.4% in December (vs +2.5% expected), the drop mainly due to a 2.2% decline in transportation orders that defied gains in Boeing orders and vehicle assemblies. Ex-transportation there was a 0.5% gain alongside solid equipment and shipments data that accounted for a stronger than expected report overall. Inflation expectations (Michigan Univ.) for 5-10yrs ahead rose from December’s 2.3% record low to 2.6%, while overall consumer sentiment was revised higher.

Economic Event Risks Today

NZ’s trade balance for Dec should be only slightly in deficit after a poor November, with exports stronger and imports weaker.

RBA Dep. Gov. Debelle speaks in Sydney.

US personal income should bounce in Dec after a flat Nov. Spending should post a solid gain, while core and headline inflation approaches the Fed’s target. Pending home sales is also due."