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GDP better than expected; jobless claims up slightly

A very valuable resource -- and free -- I use is called Econoday. It has the latest in economic news, both upcoming and recent. Want to know the lastest EIA oil numbers. You'll have it as soon as it's posted. (One note: sometimes the market anticipates, and prices in news, or just yawns. But sometimes the news can cause some big price swings). Today, it seems the market doesn't care much.

From just this morning after the GDP numbers:

At 2.6 percent, fourth-quarter GDP proved very solid and at the high end of expectations. Consumer spending, despite the sharp drop in December retail sales, leads the report, rising at a 2.8 percent annualized rate which is down from outsized rates of 3.5 and 3.8 percent in the prior two quarters but still more than respectable. 
Business investment is a positive surprise, rising 6.2 percent for nonresidential fixed investment and back near the high single-digit increases of the first half of last year when the corporate tax cut was driving spending. Residential investment, however, did prove weak, down 3.5 percent for the fourth straight quarterly decline that offers definitive evidence of how weak the housing sector has become.
Turning from rates of growth to contributions, consumer spending leads the way as it should at 1.92 percentage points with services making up more than half this gain. Business investment added 0.82 points with the intellectual property subcomponent showing the most strength. Inventories contributed 0.13 points in what, given the general strength in demand, looks like a favorable build. Trade, as usual, pulled down GDP but only by 0.22 points in the quarter. Government purchases were a fractional plus in the quarter. 
Last year was a very favorable one for the economy, posting four quarters of respectable to very strong growth led by a 4.2 percent second-quarter surge. Overall, GDP last year grew 2.9 percent. But the outlook for the first quarter is up in the air given the year-end slump in retail sales. Yet the unusual demand in the labor market, reflected again in this morning's jobless claims report, is the economy's bedrock of strength. Price data in today's report were also steady and favorable, at an as-expected 1.8 percent for the GDP price index and 2.0 percent for the core.

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