The economy continued to expand in the fourth quarter at a solid pace, well above our estimate of potential – but nowhere near the 5% touted by the President, which was likely based on the GDP Now estimate. GDPNow was at 5.1% after the retail sales and CPI reports, with a 3.1% estimate for consumption – up from 3.0% previously. We estimate consumption is growing at closer to 2%, and with the trade and inventory data still suspect, we are more comfortable with a fourth quarter

A deluge of data rolled in this week, clarifying that the US economy continues to outperform even the more upbeat forecasts, like our own. An extraordinarily strong trade report, which was doubly biased by swelling exports of gold and plunging imports of pharmaceuticals, boosted the Atlanta Fed’s GDPNow estimate to a whopping 5.4% for the fourth quarter – which is clearly an overstatement. Still, after the first quarter’s tribulations, GDPNow was adjusted to eliminate swings

Happy New Year! As last year ended, we continued the string of much better-than-expected economic indicators with the stunning 4.3% annualized growth rate for real GDP in the third quarter. Clearly, exports had a lot to do with the number – and in many ways it is a fill for the very weak -0.8% growth rate reported for the first quarter. However, even without exports, growth in final sales to domestic purchasers was up at a 2.9% annual rate. Perhaps even more stunning was the