4Q22 GDP: Consumer Ended 2022 On A Slow Note

Bottom Line:  The 4th Quarter ended on a slow note for consumption. GDP was revised from 2.7% to 2.6% in the third estimate. That's down from 2.9% in the advance reading, with consumption dropping from gains of 2.1% in the advance reading to 1.4% in the second reading and now just 1% in this third reading. Real final domestic demand was revised even lower, now nearly flat on the quarter. This suggests consumption gains decelerated over the fourth quarter and likely started the 1st Quarter on a slow note. While some of the initial indications of consumption in January and February were stronger, the data appeared skewed higher by difficult seasonal adjustments. Of course, this is old news with only one more day until the end of the 1st Quarter. The consensus forecasts are for 1% annualized growth in the 1st Quarter, in line with our estimates and notably slower than in the 4th Quarter.

Personal consumption expenditures were revised lower from 1.4% to 1.0%.Gross private domestic investment was revised sharply higher from 3.7% to 4.5%.Exports were revised lower from -1.6% to -3.7%.Imports were revised lower from -4.2% to -5.5%.Government consumption expenditures and gross investment was revised up from 3.6% to 3.8%.