US Q4 GDP growth revised a tad lower on less stockpiling

The American economy expanded at a slightly slower than expected pace at the end of 2023.

According to U.S. Department of Commerce, gross domestic product grew at a quarterly annualised pace of 3.2% over the three months to December.

That compared to a preliminary estimate of 3.3%.

"Based on this data, the US consumer looks strong, and inflation is hovering around the Fed’s target rate," said Kathleen Brooks at XTB.

"This is the second reading of GDP and there is one more release to go, but so far it looks like a soft landing has already happened for the US economy. But, far from make life easy for the Fed, it actually makes it harder, as this data doesn’t give a clear signal about when the Fed should cut rates."

Upwards revisions to readings for household consumption, non-residential as well as residential investment and government outlays helped to offset a downwards revision to inventory growth.

Stockpiling was now estimated to have subtracted 0.27 percentage points from the rate of GDP growth, versus a prior estimate of a slight positive contribution.

On the prices front, the headline price deflator for personal consumption expenditures rose at an annual rate of 1.8% during the last quarter of 2023 and by 2.1% at the core level.

Both of those PCE readings were a tad higher than previously thought.