Consumer vs CapEx

This morning’s Q4 GDP report was a headline miss (2.6% versus an expected reading of 3.2%), mostly explained by the inability of strong consumer spending to overcome investment malaise. Bank of America Merrill Lynch’s economists break it down thusly:

Consumer comeback, slower investment

Consumer spending surged 4.3% qoq saar, which was the largest increase since 1Q 2006, and contributed 2.9pp to GDP growth. Goods spending contributed 1.2pp to growth, with durables adding 0.5pp and nondurables adding 0.7pp. Growth in services consumption was a bigger driver, adding 1.7pp. Within services, healthcare spending contributed 0.5pp for the third straight quarter, and was the largest of any major subcategory. This likely reflects the expansion of health insurance coverage from the implementation of the ACA.

The news on the investment side was mixed. There was a significant pickup in inventories to $113.1bn from $82.2, which contributed 0.8pp to GDP growth. However, we think this was largely unintentional and should result in a drawdown in 1Q. Fixed investment growth slowed to 2.3% qoq saar from 7.7% in 3Q, adding only 0.4pp to GDP. The weakness was concentrated in equipment spending which dropped 1.9%—this could be a bit of a payback after strong 11%+ growth in 2Q and 3Q. That said, core capital goods orders continued to contract in December, suggesting further decline heading into 1Q 2015. Residential investment provided a small offset to these data, growing 4.1% qoq saar in 4Q versus 3.3% in the prior quarter.


The consumer stands above it all
Bank of America Merrill Lynch – January 30th 2015

Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.

What's been said:

Discussions found on the web
  1. cong ty lam phim quang cao commented on May 23

    cong ty lam phim quang cao

    […]just beneath, are many completely not related sites to ours, having said that, they may be certainly really worth going over[…]

  2. twisted love glass dildo commented on May 24

    twisted love glass dildo

    […]Wonderful story, reckoned we could combine a few unrelated information, nevertheless actually really worth taking a look, whoa did one particular study about Mid East has got far more problerms too […]

  3. real feel vibrator commented on May 24

    real feel vibrator

    […]just beneath, are quite a few absolutely not associated sites to ours, however, they may be certainly worth going over[…]

  4. vibrator tutorial video commented on May 24

    vibrator tutorial video

    […]please visit the web sites we follow, including this one particular, because it represents our picks through the web[…]

  5. how does a vibrator work commented on May 24

    how does a vibrator work

    […]always a huge fan of linking to bloggers that I enjoy but really don’t get a whole lot of link love from[…]

  6. commented on May 25

    […]we prefer to honor numerous other internet internet sites around the internet, even though they aren’t linked to us, by linking to them. Under are some webpages worth checking out[…]

  7. mp3juices commented on May 25


    […]here are some hyperlinks to sites that we link to because we feel they are really worth visiting[…]

  8. tubidy mp3 commented on May 25

    tubidy mp3

    […]one of our visitors lately recommended the following website[…]

  9. pocket pussy review commented on May 25

    pocket pussy review

    […]check below, are some completely unrelated web-sites to ours, having said that, they are most trustworthy sources that we use[…]

  10. dildo review videos commented on May 25

    dildo review videos

    […]The facts mentioned in the article are a few of the most effective available […]

  11. male masturbator commented on May 26

    male masturbator

    […]usually posts some really exciting stuff like this. If you’re new to this site[…]

  12. powerfull vibrators commented on May 26

    powerfull vibrators

    […]we came across a cool web-site that you just might delight in. Take a appear in the event you want[…]

  13. OhMiBod Vibrator commented on May 26

    OhMiBod Vibrator

    […]one of our guests recently proposed the following website[…]