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Macro Pulse highlights recent activity and events expected to affect the U.S. economy over the next 24 months. While the review is of the entire U.S. economy its particular focus is on developments affecting the Forest Products industry. Everyone with a stake in any level of the sector can benefit from
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Thursday, March 30, 2017

4Q2016 Gross Domestic Product: Third Estimate

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In its third estimate of 4Q2016 gross domestic product (GDP), the Bureau of Economic Analysis (BEA) revised the growth rate of the U.S. economy to a seasonally adjusted and annualized rate (SAAR) of +2.08% (above consensus expectations of 2.0%), up slightly from the +1.85% previously reported but significantly slower (-1.45 percentage points) than 3Q2016’s +3.53%.
Three of the four groupings of GDP components -- personal consumption expenditures (PCE), private domestic investment (PDI), and government consumption expenditures (GCE) -- contributed to 4Q growth; net exports (NetX) detracted from it.
The improvement in the reported growth came primarily from increased consumer spending on services, with smaller increases in consumer goods spending and inventories also boosting the headline number. Offsetting those increases were continued weakening in commercial fixed investment, governmental spending and foreign trade. 
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“For the moment this closes the BEA's book on the fourth quarter of 2016,” wrote Consumer Metric Institute’s Rick Davis. “A roughly 2% growth rate is certainly acceptable, but it is not the sort of growth rate that normally generates delirious optimism in the equity markets. Next month we should begin to find out how much of that optimism is economically warranted.”
The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.

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