U.S. economic growth slowed in the fourth quarter but not as sharply as previously estimated, with fairly strong consumer spending offsetting the drag from efforts by businesses to reduce an inventory overhang. Gross domestic product increased at a 1.4 percent annual rate instead of the previously reported 1 percent, the Commerce Department said Friday in its third GDP estimate.


There was some bad news in the GDP report, with corporate profits falling for a second straight quarter as a strong dollar and cheap oil undercut the earnings of multinational and energy companies.

Something doesn't square here -- how is consumer spending "up" but corporate profits are down? We suspect this is a hidden-inflation effect: consumer spending is really not even keeping up with inflation, which means corporates aren't earning more than costs, which is why their profits are down....

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