⚡Crypto Alert : Altcoins are up 28% in just last month! Unlock gains and start trading now - Click Here

Q4 US GDP Revised Lower, Sends USD Retreating

Yesterday the US Dollar was trying to make a comeback, but the lower revisions of the US GDP for Q4 ended the bullish rally and the USD turned bearish in the US session. At the end of the day, the USD finished little changed, with risk sentiment also being neutral, as shown by the consolidation in stock markets. S&P500 is still consolidating gains above 5,000 points.

US Q4 GDP Prelim

 US GDP revisions for Q4

BrokerReviewRegulatorsMin DepositWebsite
🥇Read ReviewASIC, FSA, CBI, BVI, FSCA, FRSA, CySEC, ISA, JFSAUSD 100Visit Broker >>
🥈Read ReviewFMA, FSAUSD 50Visit Broker >>
🥉Read ReviewFSCA, CySEC, DFSA, FSA, CMAUSD 0Visit Broker >>
4Read ReviewSFSA, FSCA, CySec*USD 5Visit Broker >>
5Read ReviewFCA, CySEC, FSCA, SCBUSD 100Visit Broker >>
6Read ReviewFCA, FINMA, FSA, ASICUSD 0Visit Broker >>
7Read ReviewCySEC, FCA, FSA, FSCA, Labuan FSAUSD 100Visit Broker >>
8Read ReviewNot Regulated0.001 BTCVisit Broker >>
9Read ReviewASIC, CySEC, FSCA, CMAUSD 100Visit Broker >>
10Read ReviewCySEC,MISA, FSCAUSD 20Visit Broker >>

The second look at Q4 2023 GDP in the United States showed a growth rate of 3.2%, slightly below the expected 3.3%. This reading matches the advance Q4 figure. However, compared to the final Q3 reading of 5.2% and Q2’s 2.1%, the growth rate has moderated.

US Prelim GDP for Q4 2023

  • US Q4 GDP (second reading) +3.2% vs +3.3% expected
  • Advance Q4 reading was +3.2% annualized
  • Final Q3 reading was +5.2% annualized
  • Q2 was +2.1% annualized

Key details from the report include:

  • Consumer spending increased by 3.0%, surpassing the advance estimate of 2.8%. However, consumer spending on durables was weaker than expected, growing by 3.2% compared to the advance estimate of 4.6%.
  • GDP final sales rose by 3.5%, outpacing the advance estimate of 3.2%.
  • The GDP deflator, which measures inflation, was reported at 1.7%, higher than the advance estimate of 1.5%.
  • Core PCE, a key inflation indicator, rose by 2.1%, in line with the advance estimate of 2.0%.
  • Business investment expanded by 0.9%, below the advance estimate of 2.1%.

The report also highlighted changes in percentage points in various components:

  • Net trade contributed 0.32 percentage points to GDP growth, lower than the advance estimate of 0.43 percentage points.
  • Inventory building added 0.27 percentage points, higher than the advance estimate of 0.07 percentage points.
  • Government spending contributed 0.73 percentage points to growth, exceeding the advance estimate of 0.56 percentage points.

Overall, the weaker business investment and consumer spending, coupled with stronger-than-expected contributions from government spending and inventory building, pose downside risks to growth in 2024. Consequently, the US dollar softened in response to the report.

The picture in the GDP report is of weaker business investment and consumer spending with a stronger-than-believed contribution from government spending and inventory building. Those are downside risks for 2024 growth and that’s why the US dollar softened on the report.

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
ABOUT THE AUTHOR See More
Avatar
Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
Related Articles