As GDP releases go, this one doesn’t garner much attention because of the limited amount of new information.  The new information that merits some discussion includes revisions and profits.  First up, revisions.  GDP growth was revised up from 2.8 percent at an annual rate to 3.1 percent.  How large is the typical revision?  0.3 percentage point, so today’s revision is of average size.  Also, if you recall last month, the numbers were revised down by 0.4 percentage point.  What does all of this mean?  It means that the economy was growing at about a 3 percent annual rate at the end of last year, and today’s revision doesn’t alter the fundamental view of what is happ

A closely watched component of tomorrow’s GDP release by the U.S. Commerce Department’s Bureau of Economic Analysis (BEA) will be corporate profits.  Corporate profits receive lots of attention for a variety of reasons.  One of those reasons is that corporate profits touch many of us through the linkage between profits (and future expected profits) and stock prices, as those stock prices affect the value of our 401k and other retirement plans. 

The U.S. current-account deficit decreased to $113.3 billion, or 3.1% of GDP in the fourth quarter of 2010, down from $125.5 billion in the third quarter of 2010, or 3.4% of GDP.

U.S. International Transactions Fourth Quarter 2010

Personal income in January 2011 rose 1.0 percent. Nominal personal consumption expenditures (PCE) increased 0.2 percent, while real PCE declined 0.1 percent. Nominal disposable personal income (DPI) rose 0.7 percent while real DPI increased 0.4 percent. The personal saving rate as a percentage of DPI was 5.8 percent in January.

Personal Incomes and Outlays, January 2011

Today’s release covers personal income and consumer spending for the month of January.  The big news is on the income side where personal income increased 1.0 percent in January -- the largest increase since May 2009 and substantially higher than private expectations of 0.4 percent.  Why did income go up so much?  The bottom line is that income was substantially boosted by the tax cuts the President signed in December.  More specifically, the jump in income in January from December was driven by the reduction in the withholding rate for social security from 6.2 to 4.2 percent.   Wages and salaries, the largest component of income, rose a modest