This will be the preliminary data, the 'advance' GDP
- Due at 1330 GMT
Deutsche Bank preview:
- the week's main focus will be Friday's advance GDP report for Q4 2017 (+3.3% forecast vs. +3.2% previous)
- If our Q4 estimate is close to the mark, it would be the third consecutive quarter of 3%-plus inflation-adjusted output growth and the economy will have ended the year having expanded 2.7% (Q4/Q4) - the best performance since 2014 (2.7%).
- Indeed, we have modestly revised up our 2018 growth forecast
- if Congress were to pass a spending bill that raises defense and nondefense spending caps along the lines being discussed, there is further upside risk to our 2.4% (Q4/Q4) real GDP growth projection
And also:
- Released alongside Q4 GDP is December durable goods orders
- While a challenging seasonal factor for aircraft orders may drag on headline durables (+0.5% vs. +1.3%), orders excluding transportation (+1.0% vs. -0.1%) should rebound given December's strong manufacturing data.
- As always, we will pay close attention to the core of the report, which is nondefense capital goods orders excluding aircraft (+1.0% vs. -0.2%), as this series provides a good read on equipment spending in the GDP accounts.
- Technically, the BEA uses core shipments in its estimation of equipment spending in GDP but new orders provide a bit of lead in this regard.
- ... there may be upside risk to our estimates of longer-term potential growth should recent tax measures spur greater investment spending over the next few years relative to what we currently anticipate. This would undoubtedly be a welcome development if tax reform were to result in a more supply-side driven expansion over time
