Advance Estimate 4Q2018 GDP Quarter-Over-Quarter Growth At 2.6 Percent

The advance [and second] estimate of fourth quarter 2018 Real Gross Domestic Product (GDP) is a positive 2.6 %. This growth is worse than the previous quarter's 3.4 % if one looks at quarter-over-quarter headline growth.Year-over-year growth improved modestly so one could also say economic growth was better.

Analyst Opinion of GDP

Over 2 % of this 3.5% growth number is attributable to inventory growth (materials manufactured but not yet sold). I consider this a very weak report.

I am not a fan of quarter-over-quarter exaggerated method of measuring GDP - but my year-over-year preferred method showed moderate acceleration from last quarter.

The market expected (from Econoday):

Seasonally Adjusted Quarter-over-Quarter Change at annual rate Consensus Range Consensus







Real GDP 1.8 % to 2.8 % 2.4 % +2.6 %    
GDP price index 1.3 % to 2.3 % 1.6 % +1.8 %    
Real Consumer Spending - Q/Q change     +2.8 %    


  • This advance estimate released today is based on source data that are incomplete or subject to further revision. (See caveats below.) Please note that historically advance estimates can be little more than wild guesses. HOWEVER - because of the government shutdown - this is also considered the second release of 4Q2018 GDP.
  • Headline GDP is calculated by annualizing one quarter's data against the previous quarters data. A better method would be to look at growth compared to the same quarter one year ago. For 4Q2018, the year-over-year growth is now 3.1 % - up from 3Q2018's 3.0 % year-over-year. So one might say that the rate of GDP growth improved 0.1 % from the previous quarter.

Real GDP Expressed As Year-over-Year Change

The same report also provides Gross Domestic Income (GDI) which in theory should equal Gross Domestic Product. Some have argued the discrepancy is due to misclassification of capital gains as ordinary income - but whatever the reason, there are differences.

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