Downward revision to US Q4 GDP growth is nothing to worry about: Capital Economics

Quotes from Capital Economics:

- The downward revision to US fourth-quarter GDP growth to 2.2% annualised, from the initial 2.6% estimate, is nothing to worry about.

- Revision was entirely due to slower inventory accumulation, which is now estimated to have added only 0.1% points to overall GDP growth, compared with 0.8% in  the first estimate. A slower inventory build in the fourth quarter of last year means that inventories won't be quite as big a drag on first-quarter growth as we feared. 

- With lower energy prices providing a big boost to households' purchasing power, there is every reason to believe that domestic demand will grow at a rapid clip over the first half of this year too.

- Finally, the usual suspects will claim that this slowdown in GDP growth signals some sort of underlying fragility in the US economy, perhaps triggered by the end of QE. Ignore them. That's the same economy that added an average of 284,000 additional jobs in each of the final three months of last year. It's doing just fine and the Fed will start to hike rates in June.