US Macro: Q4 2004 GDP

Friday, January 28, 2005 | | 0 comments »


At 3.1% lower than the expected 3.5%. In itself a chunky negative surprise for the US markets which are down (for now at least) on the back of the announcement.

But within the 3.1% the government component is sitting at 0.9% up less than expected from Q3's 0.7%. The Q1 and Q2 numbers were 2.5% and 2.2%.

This is noteworthy: the current economic recovery was kick-started by fiscal stimuli - most notably tax cuts and deficit-spending. With those being scaled back (well, theoretically deficit reduction is the order of the day in Washington) the hope all round must be that the economy is now self-sustaining.

On that count the signs are mixed. But the likely budget-busting $80 billion supplementary for Iraq being prepared by the Bush Administration indicates that the crutches of fiscal stimuli haven't been kicked away quite yet.

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