This Friday, January 28, the U.S. Commerce Department is slated to release its first estimate for fourth-quarter 2004. That's just two days before Chairman Alan Greenspan and his colleagues on the Federal Open Market Committee (FOMC) begin a two-day meeting in Washington, D.C.
Economists generally expect Commerce to report inflation-adjusted GDP growth of 3.5% for last year's October through December quarter. Although a half a percentage point less than the third quarter's 4.0%, that's not likely to cause the FOMC to abandon its "measured" pace of increases in the influential federal funds target rate. The rate currently is 2.25%, and a 25-basis-point increase to 2.5% is expected to be approved at next week's FOMC meeting.