US Q4 GDP revised higher on change inventory valuation method

The US economy expanded at a faster rate in Q4 than initially estimated on account of an upward revision in the value of business inventories.

The economy expanded at an annualized rate of 1% compared with an initial estimate of 0.7%, Commerce Department figures showed today.

Consumer spending, which is a main driver of the economic growth, was revised lower. The sharp upward revision of the GDP was mainly due to change in the way unsold goods are valued. In inflation-adjusted terms, the inventory accumulation was more than previously estimated as underlying price data were revised up.

Meanwhile, the trade gap also weighed less on growth than earlier estimated and that is a slightly positive development.

The US economy expanded at a faster rate in Q4 than initially estimated on account of an upward revision in the value of business inventories.

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