The third and final estimate of GDP for Q4 2017 was revised upwards to 2.9% from the previous estimate of 2.5%, showing a slight moderation from the previous quarter’s 3.2% rate. The upward revision was largely due to increased estimates for consumer spending (+0.2% to +4.0%), primarily from increased spending on transportation services, and decreased estimates for drops in private nonfarm inventories (+0.17% to -0.53%). Annual GDP for 2017 rose to +2.3% compared to +1.5% for 2016. Real gross domestic income grew +0.9% in Q4, down from 2.4% in Q3, and after tax corporate profits were up +1.7% for Q4 (vs +4.8% in 2016 Q4), and +6.0% for 2017 (vs -0.5% for 2016).

Goods exports increased by +$2.9 billion to $136.5 billion in February, but imports increased +$3.0 billion to $211.9 billion, widening the goods trade deficit by +0.1% to $75.4 billion. Exports increased notably for automobiles (+6.6%, +9.1% Y/Y), other/military goods (+5.6%, +1.5% Y/Y), and petroleum/industrial supplies (+4.6%, +13.1% Y/Y), and dropped for consumer goods (-4.2%, +0.9% Y/Y). Imports increased for food (+6.3%, +12.0% Y/Y), capital goods (+3.0%, +13.1% Y/Y), and petroleum/industrial supplies (+1.4%, +9.1% Y/Y), and dropped for other/military goods (-4.5%, +4.6% Y/Y). Year over year, exports increased +7.6% and imports increased +10.8%.

A +0.5% increase in wages and salaries helped boost personal income to a +0.4% increase in February, with inflation and tax adjusted real disposable personal income (DPI) up +0.2%. Spending was up +0.2%, with a -0.2% drop in nondurable goods spending limiting the gains from of a +0.3% increase in services spending. The personal saving rate as a percent of DPI was up to +3.4%, its highest rate in six months. The price index for personal consumption expenditures (PCI) for services was up +0.3%, but a -0.3% drop in durable goods prices brought overall PCI to a +0.2% increase. PCI prices were down for both food (-0.1%) and energy (-0.1%), and core PCI, which excludes both food and energy and is the Federal Reserve’s preferred inflation measure, was +0.2% for the month and up +0.1% to +1.6% for the year.