US GDP Decreased at an Annual Rate of 0.1% in Q4 2012

The US dollar index drop 10 points when the GDP announcement was released. The Bureau of Economics said that real gross domestic product  decreased at an annual rate of 0.1 percent in the fourth quarter of 2012.  In the third quarter, real GDP increased 3.1 percent.

I think the market was hopeful of a better number. The US dollar index was technically poised to go higher. It was in a good position but instead drop sharply at 8:30 when the announcement was released.

The Bureau emphasized that the fourth-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency. The “second” estimate for the fourth quarter, based on more complete data, will be released on February 28, 2013.

The decrease in real GDP in the fourth quarter primarily reflected negative contributions from private inventory investment, federal government spending, and exports that were partly offset by positive contributions from personal consumption expenditures (PCE), nonresidential fixed investment, and residential fixed investment.

Imports, which are a subtraction in the calculation of GDP, decreased. The downturn in real GDP in the fourth quarter primarily reflected downturns in private inventory investment, in federal government spending, in exports, and in state and local government spending that were partly offset by an upturn in nonresidential fixed investment, a larger decrease in imports, and an acceleration in PCE.

Final sales of computers added 0.15 percentage point to the fourth-quarter change in real GDP after adding 0.11 percentage point to the third-quarter change. Motor vehicle output added 0.04 percentage point to the fourth-quarter change in real GDP after subtracting 0.25 percentage point from the third-quarter change.

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