Fourth quarter GDP grew by 1.9%, down from the third quarter’s 3.5% rate and missing it’s estimate of 2.2%. Factors that slowed down growth in Q4 included decreases in exports, consumer spending and federal spending, and an increase in imports. Factors that aided growth were increases in fixed investments, private inventories, and state and local spending. GDP for 2016 grew at an overall 1.6% vs 2.6% in 2015.

After November’s -4.8% decrease in new durable goods orders, economists had predicted December would come in at 2.2%, but a drop in military aircraft orders brought new orders to -0.4%. However, excluding transportation, orders rose to a predicted +0.5%, and core capital goods orders (excluding aircraft and military orders) rose to +0.8%. Overall, Y/Y orders were down for 2016, but both core capital goods orders and orders excluding transportation were up each month in the fourth quarter.

The International Trade in Goods estimate from the Census Bureau showed a reduction in the trade deficit of -0.3% to $65 Billion, narrowly beating expectations. Capital Goods (+7.3%) and Industrial Goods (+1.4%) led the Export 3.0% increase in a sharp rise from November’s -0.3% contraction. Automotive Vehicles led the 1.8% import increase, which was up narrowly over November’s 1.4% increase.