Norris unpacks the Q4 GDP numbers in the NYT, and concludes that
Lower inflation and improved exports made a mediocre quarter appear much
better than it was.
has much the same conclusion, but cites consumer spending as the main factor
keeping GDP figures afloat. Barry
Ritholtz splits the difference, saying that yes, consumer spending was high
at 4.4%, but that was mainly because of low – in fact, negative –
inflation, with nominal spending rising a pretty mediocre 3.6%.
In every quarter, of course, some GDP components are healthier than others.
But it is a bit weird to find so much ink spilled on worrying about how low
inflation is!
Who’s worried? The point is that the headline was a bit distorted. Me, I was much enheartened by the durables PCE, which came in nice again for a quarter after three of four previous had been on the weak side. When consumers are buying big-ticket durables, they’re consuming.