The second estimate for fourth quarter GDP showed a downward revision to 2.7% growth (consensus 2.9%) from advance estimate of 2.9%. That was driven by a downward revision in personal spending growth to 1.4% from 2.1%. The GDP Price Deflator was revised up to 3.9% (Briefing.com consensus 3.5%) from 3.5%. The personal consumption expenditures index, meanwhile, was revised up to 3.7% from 3.2%.
The key takeaway from the report is that it is an off-putting mix for the Fed. Growth is still running above potential and inflation is still running above target.