U.S. GDP REVISED UP, M1 VELOCITY STILL DOWN (Originally from 2016)

(I think that the blog post below is from February 29, 2016.)

On Friday (February 26) of last week, CNBC and others reported that the revised estimate of U.S. real GDP for the fourth quarter of 2015 increased by one per cent, a higher growth rate than initially estimated. Data accessed today from www.economagic.com also show that real GDP increased by approximately one per cent at an annualized rate last quarter, as well as providing other estimated data. The revised estimate for growth in the implicit deflator, a price index, was also approximately a one per cent increase. Combining these two, nominal GDP spending increased in the fourth quarter of 2015 by approximately two per cent according to the latest estimate (although further revisions are likely forthcoming).

However, the estimated growth rate in the U.S. M1 money supply was still greater than the growth of nominal GDP spending in the fourth quarter of 2015. Therefore, like the initial estimate of the velocity of the M1 money supply for the last quarter, the revised estimate shows a decline in M1 velocity, but by a smaller amount. Will the dramatic decline in M1 velocity in the United States continue in the year 2016?