Posted Wednesday, Feb. 29, 2012, at 8:36 AM
I'm told by those in the know that "expectations" were for the Q4 GDP numbers to stay the same upon revision as with their initial 2.8 percent reading. I don't know why people expected that, lately revisions to economic data have all been upward revisions and you'd expect estimation errors of this sort to be systematically correlated. And indeed they were. Upon revision we're now looking at three percental annualized growth in the forth quarter of 2011, which would be an extremely solid number in a non-depressed economy but counts as merely "okay" given the circumstances. Still it shows that Recovery Winter is well on track if you look at all the data.
Particularly interesting for the market monetarists in the house is that nominal GDP was revised up from a pathetic 3.2 percent to a still-disappointingly-weak 3.9 percent. That's a powerful reminder that there's still plenty of room for monetary stimulus out there.