Monthly GDP rose 0.1% in December following a 0.7% decline in November (revised from -0.8%). The modest increase in December reflected a large increase in nonfarm inventory-building that was nearly offset by a large decline in domestic final sales. The latter reflected a sharp decline in personal consumption expenditures which, at least in part, was due to a pull-forward of holiday sales into October and November.

The level of GDP in December was 0.5% below the fourth-quarter average at an annual rate. Implicit in our forecast of 1.8% GDP growth in the first quarter are increases in January, February, and March that average 0.4% per month (not annualized).

IHS Markit's index of Monthly US 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 2022 by Ben Herzon, US Economist, Insights and Analysis, S&P Global Market Intelligence and

William Magee, Economist, Economics & Country Risk, S&P Global Market Intelligence