Core Economic Growth Slowed Sharply In Q4

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		Tech Entertainment Wall Street Markets Strategy Sports Lifestyle Politics Europe Video Latest Friday, January 27, 2012 Core Economic Growth Slowed Sharply In Q4 In regards to this morning's mediocre GDP report, Nomura cuts right to the chase in a note titled 'Core Economic Growth Slowed Sharply' in Q4. Here's their commentary: Inventory building contributed 1.9 percentage points (pp) to growth in Q4 2011 after subtracting 1.4pp in Q3. The measure of final sales, which is a “core” view of the economy that removes the effect of inventories, grew at an annual rate of just 0.8% in Q4 compared with 3.2% in Q3. Under this perspective, the US economy slowed sharply in the final quarter of the year. The choppiness in quarterly growth in the back half of 2011 is partially due to the rebound following the dampening effect on economic growth stemming from the Japan earthquake and tsunami that hit on 11 March. The second half rebound was front-loaded into Q3. The same pattern can be seen when looking at the industrial production data, which also tracks the broad economy. In Q3, industrial production rebounded to an annual growth rate of 6.3% (following 0.6% in Q2) followed by slower growth of 3.1% in Q4. To smooth the effect of the rebound from temporary factors, economic growth in H2 2011 advanced at an average annual rate of 2.2% compared with 0.8% in H1. And here's the chart that demonstrates the point. The gray line is what Nomura calls 'core'. Read » Also On Money Game Today: Barclays Bullish On Commodities In 2012 U. Michigan Consumer Confidence Surges To 75.0 This Stock Market Is Something To Behold Why Today's GDP Number Was Even Worse Than It Looked Advertisement CHART OF THE DAY: A Completely Random Correlation That Tells You Everything About This Market CHART OF THE DAY: Why Is The Baltic Dry Index Getting Crushed? CHART OF THE DAY: New World Oil Demand Blasts Past Old World Share this: Facebook Twitter Digg Reddit StumbleUpon LinkedIn The email address for your subscription is: ipat39@gmail.com Change Your Email Address | Unsubscribe | Subscribe | Subscribe to the Money Game RSS Feed Business Insider. 257 Park Avenue South, New York, NY 10010 Terms of Service | Privacy Policy

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