Economic growth in Q4/Claims data/ECB and Lagarde

Q4 GDP grew 2.3% on a q/o/q annualized rate, below the estimate of 2.6% but again, always important to look under the hood. Nominal GDP was up 4.5% vs the estimate of 5.1% as a lower price deflator flattered the REAL figure. If the deflator was as expected, Real GDP would have printed 2%.

The consumer helped to drive the growth bus with a 4.2% gain driven by a 12.1% jump in durable goods spending with help from motor vehicles and recreation. Spending on services continues to be led by healthcare and leisure/hospitality. Consumption alone added 282 bps to the GDP figure. This was offset by a clip of 103 bps from gross private investment because of declines in equipment spending and non-residential structures (much of which is CRE). Spending on IP added 15 bps to GDP growth, and assume this is where AI spend is showing up in.