Monthly GDP was essentially flat in December following a 1.2% decline in November that was revised lower by 0.4 percentage point. The flat reading in December reflected declines in personal consumption expenditures and inventory investment that were essentially offset by increases in nonresidential fixed investment, residential fixed investment, net exports, and the portion of monthly GDP not covered by the monthly source data. The level of GDP in December was 1.7% below the fourth-quarter average at an annual rate. Implicit in our latest tracking forecast of 3.1% annualized growth in the first quarter is a jump in GDP in January that reverses the weakness over the prior two months.

IHS Markit's index of Monthly GDP (MGDP) is a monthly indicator of real aggregate output that is conceptually consistent with real Gross Domestic Product (GDP) in the National Income and Product Accounts. The Monthly GDP Index is consistent with the NIPAs for two reasons: first, MGDP is calculated using much of the same underlying monthly source data that is used in the calculation of GDP. Second, the method of aggregation to arrive at MGDP is similar to that for official GDP. Growth of MGDP at the monthly frequency is determined primarily by movements in the underlying monthly source data, and growth of MGDP at the quarterly frequency is nearly identical to growth of real GDP.

Posted 01 February 2021 by Ben Herzon, US Economist, Insights and Analysis, S&P Global Market Intelligence and

Kathleen Navin, Economics Executive Director, US Macroeconomics, S&P Global Market Intelligence