US Q4 GDP Confirmed At 0.6%, But Jump in Consumption Leads US Dollar to Rally

US Q4 GDP was confirmed at a tepid 0.6 percent annualized pace, down from 4.9 percent in Q3. The slowdown was led primarily by a plunge in residential investment, while exports slowed to 6.5 percent from 19.1 percent, despite the weakness of the US dollar. However the greenback responded primarily to the revision to the personal consumption component up to 2.3 percent from the preliminary estimate of 1.9 percent, as EUR/USD tumbled lower for a break below 1.5750. While this still represents softer spending relative to Q4, the data suggests that consumers may have not been as averse to loosening their purse strings as previously expected.

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