Q4 GDP revised to +0.1% (from -0.1%)

The BEA revised Q4 GDP to +0.1% (from -0.1% reported on January 30). The revision was not a surprise. Nobody believed that Q4 GDP was negative. What was surprising was that the revision was so minute.

Much of the upward revisions came from trade sector. Exports added 0.3 ppt more while imports added another 0.2 ppt. This suggests that global economy was more resilient than thought. Another 0.2 ppt up revision came from non-residential structure. Not a surprise again, given that real estate has gotten a boost from the Fed's accommodative policy.

What contributed less to Q4 GDP were Equipment & Software Investment (0.1 ppt), State & Local Government (0.1 ppt) and Inventory (0.3 ppt). Inventory subtracted 1.6 ppt from GDP vs 1.3 ppt in the prior reading. It appears that inventory stuffing at JCP and KSS, which reported yesterday were exceptions rather than a rule.

Subtraction to GDP from inventory is a very bullish sign. Inventory cycle could easily add 1 ppt to GDP in a future quarter.