Economic Brief 01/30/15

Economic Brief
Fourth Quarter GDP Report
The pace of US GDP growth slowed to 2.6% in the fourth quarter according to the
initial estimate from the Commerce Department. This follows a 5% rate in the third
quarter, and puts the final 2014 growth rate at 2.5%. Consensus estimates before
the release had the Q4 number at 3%. Notably (and somewhat disturbingly), the
GDP price index plunged to a 0.0% change for the quarter, and 1.2% YOY. Much of
this is energy related, but it no doubt adds to fears of general deflation infecting
the US economy in spite of relatively strong trend growth.
Parsing the top-line GDP number, personal consumption expenditures ramped
up by 4.3%, an increase from the prior rate of 3.2%. Net exports rose 2.8%, a
deceleration from Q3’s 4.5% pace. Real final sales of domestic product (which
strips out inventory adjustment and net exports) dropped to a 1.8% pace from
an increase of 5% in the third quarter. This suggests that there was a slowdown
in overall domestic demand. Overall, the growth trend remains healthy, but the
inflation data is uncomfortable. Bond prices are up sharply after the release… 10yr
up 3/4pts at a 1.66% yield.
US GDP Price Index - Quarterly Change: 1994 - Today
Financial Strategies Group
Jeffrey F Caughron
Chief Operating Officer / Managing Director
[email protected]
(800) 937-2257
Contact Information
The Baker Group LP | Headquarters
1601 NW Expressway, 20th Floor
Oklahoma City, OK 73118
(800) 937-2257
Austin, TX
1700 Rio Grande, Suite 120
Austin, TX 78701
(888) 480-0301
Birmingham, AL
2204 Lakeshores Drive, Suite 213
Birmingham, AL 35209
(855) 500-4546
Indianapolis, IN
8365 Keystone Crossing, Suite 100
Indianapolis, IN
(866) 370-3580
Salt Lake City, UT
2975 West Executive Pkwy, Suite 139
Lehi, UT 84043
(800) 288-9411
Springfield, IL
901 Community Drive
Springfield, IL 62703
(888) 333-7704
INTENDED FOR INSTITUTIONAL INVESTORS ONLY. The data provided in these reports is for informational purposes only and is intended solely for your private use. Information herein is believed to be reliable but The Baker Group LP
does not guarantee its completeness or accuracy. Opinions constitute our judgment and are subject to change without notice. Past performance is not indicative of future results. The investments and strategies discussed here may
not be suitable for all investors; if you have any doubts you should consult your Baker representative. The investments discussed may fluctuate in price or value. Changes in rates of exchange may have an adverse effect on the value
of investments. This material is not intended as an offer or solicitation for the purchase or sale of any financial instruments.
Oklahoma City, OK | Austin, TX | Birmingham, AL | Indianapolis, IN | Salt Lake City, UT | Springfield, IL |
The Baker Group | 1601 Northwest Expressway, 20th Floor | Oklahoma City, OK 73118 | 800.937.2257 | Member FINRA and SIPC
January 2015
Page 1