The U.S. Government's Bureau of Economic Analysis (BEA) released its 4Q2020 GDP initial estimate on January 28^th. The result was a 4% increase in GDP on an annualized basis. This follows the whipsaw -31% down then 33% up readings from the second and third quarters of 2020 respectively. Based on the latest data the economy shank by 3.5% overall in 2020.

One leading driver during the final quarter was industrial investment spending. Per the BEA's report: "The increase in exports primarily reflected an increase in goods (led by industrial supplies and materials). The increase in nonresidential fixed investment reflected increases in all components, led by equipment... The increase in residential fixed investment primarily reflected investment in new single-family housing. The increase in private inventory investment primarily reflected increases in manufacturing and in wholesale trade...".

Recall that the components of GDP include private consumption spending, investment spending, government spending and lastly net-exports. Breaking out the headline GDP figure by its components shows both where the economy grew and contracted:

The contribution of durable goods to the growth in personal consumption was negligible as growth in “motor vehicles and parts” along with “Other durable goods” was offset by declines in “Recreational goods and vehicles” and “Furniture and durable household equipment”.  Despite the underwhelming data for durable goods consumption, this does not tell the whole manufacturing story.  Fixed investment in nonresidential structures and equipment powered much of the 4% growth in investment followed by increased inventories.