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Here comes GDP ...

Feb 28, 2018, 18:46 IST

Factory workers at the New Balance Shoe Factory operate machinery before Speaker of the House Paul Ryan (R-WI) talks about tax reform during a visit to the facility on July 20, 2017 in Lawrence, Massachusetts.Adam Glanzman/Getty

The Commerce Department will release its second estimate of fourth-quarter gross domestic product at 8:30 a.m. ET.

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Economists forecast that the value of all goods and services produced in the US increased at an annualized rate of 2.5%, according to Bloomberg.

That's down from the 2.6% growth rate stated in the first estimate, as economists project that consumer spending, the biggest contributor to the economy, was not as strong as initially reported. The consensus forecast now sees 3.6% growth in personal consumption, down from 3.8%.

Still, these projections show that the economy is still going strong nearly a decade after the last recession. With tax cuts now enacted, it will be important to watch for whether the companies and consumers put that extra cash to work.

The pace of growth would also justify higher interest rates from the Federal Reserve this year. Wednesday's print will include a revision to the personal consumption expenditures, which is the primary way the Fed tracks inflation.

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"My personal outlook for the economy has strengthened since December," Jerome Powell, the Fed chairman, said during his first testimony before the House Financial Services Committee on Tuesday.

His other comments all but confirmed that the Fed will raise rates again at its meeting next month, and could consider four instead of the expected three increases this year if the economy continues to strengthen.

The Commerce Department will next month release another GDP print for the final quarter of 2017 when it has even more complete data.

More to come ...

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