More Incredibly Sloppy Government Reporting of Numbers. Why don't they just wait if they keep missing the mark by such a wide margin that they actually screw markets and traders up? Inventories Limit Fourth-Quarter Growth: U.S. Economy Preview By Vince Golle http://www.bloomberg.com/apps/news?pid=20601087&sid=aZJgdTGnBfkM&refer=home Feb. 25 (Bloomberg) -- The U.S. economy in the last three months of 2006 grew less than the government previously estimated as companies stepped up efforts to curb inventories, a report this week is projected to show. The world's largest economy expanded at an annual rate of 2.3 percent last quarter, compared with the 3.5 percent pace the Commerce Department reported last month, according to the median forecast in a Bloomberg News survey of economists. Smaller stockpiles suggest companies will boost orders in coming months, giving factory production and the economy a lift. Consumer spending, which a separate report may show increased for a fourth consecutive month in January, has sustained the expansion during the worst real-estate slump in 15 years. ``The ability of producers to liquidate excess inventories augers well for a more rapid return to more normal levels of production,'' said Carl Tannenbaum, chief economist at LaSalle Bank in Chicago. ``We are likely to see a modest and sustainable pace of growth as we move through the early part of the year.'' The Commerce Department will issue its revised fourth- quarter growth estimates on Feb. 28. The level of inventories last quarter will be revised down by $26 billion at an annual rate, enough to shave almost a full percentage point off the government's previous growth estimate, according to a forecast by economists at Lehman Brothers Holdings Inc. in New York. First-Quarter Boost Lehman economists also raised their forecast for growth this quarter to 3 percent from 2.5 percent based on the smaller inventory level in the last three months of 2006. Home construction slumped at a 19.2 percent rate last quarter, the most since 1991, after shrinking at an 18.7 percent pace in the third, the Commerce Department's growth estimate last month showed. Homebuilders including Lennar Corp. and D.R. Horton Inc. are also paring inventory after sales slowed. Reports on home sales this week are expected to show that builder incentives, lower prices and cheaper borrowing costs are merely stabilizing demand. The Commerce Department will report on Feb. 28 that sales of new homes declined 3.6 percent to an annual rate of 1.08 million. A day earlier, the National Association of Realtors' report on sales of previously owned homes is projected to show a 0.3 percent increase. The new-home sales figures provide a more timely snapshot of the housing market because they are recorded when a contract is signed. Most purchases of existing homes are counted when a sales close, usually a month or two later. Smaller Housing Declines Even with a drop, the level of new-home sales in January would still be higher than the three-year low reached in July last year, reinforcing forecasts by Federal Reserve policy makers, including Chairman Ben S. Bernanke, that the worst of the housing slump is over. ``The U.S. economy seems likely to expand at a moderate pace this year and next, with growth strengthening somewhat as the drag from housing diminishes,'' Bernanke told lawmakers Feb. 14 during his semi-annual monetary policy testimony. Consumer spending, which accounts for more than two-thirds of the economy, increased 0.4 percent in January after a 0.7 percent rise a month earlier, the Commerce Department is forecast to report on March 1. Lehman economists said the figures are consistent with spending growth at a 3.2 percent pace in the current quarter compared with a 4.4 percent rate in the prior three months. Smaller Income Gain The report is also forecast to show incomes increased 0.3 percent in January after a 0.5 percent rise. The figures may reflect a slowdown in wage growth after the Labor Department earlier this month reported the number of hours worked dropped and hourly earnings increased at a slower pace. Figures on inflation that are released with the income and spending data may show price pressures have yet to dissipate. The department's measure of prices tied to spending and excluding food and energy is forecast to increase 2.3 percent from January 2006, an acceleration from the 2.2 percent year- over-year rise a month earlier. The so-called core personal consumption expenditures price index is the Fed's preferred gauge of inflation. October's 2.4 percent year-over-year gain matched a four-year high. In Congressional testimony earlier this month, Bernanke said inflation, which he forecasts is likely to subside, remains the central bank's primary concern. ``There are some indications that inflation pressures are beginning to diminish,'' he told the Senate Banking Committee on Feb. 14. ``The monthly data are noisy, however, and it will consequently be some time before we can be confident that underlying inflation is moderating as anticipated.'' Other reports this week: -- The Conference Board in New York is forecast to report on Feb. 27 that its consumer confidence index fell to 108.7 in February from 110.3. -- The Commerce Department may also report that orders for durable goods dropped 3 percent in January, likely reflecting a decrease in the number of bookings for Boeing Co. aircraft -- On March 1, the Institute for Supply Management is forecast to report its manufacturing index rose in February to 50, the dividing line between expansion and contraction, from 49.3 in January. -- The same day, the Commerce Department is forecast to report that construction spending declined 0.5 percent in January after a 0.4 percent drop. Bloomberg Survey Date Time Period Indicator BN Survey Prior 02/27 8:30 Jan. Durable Goods Orders -3.0% 2.9% 02/27 10:00 Feb. Confidence-Conf. Board 108.7 110.3 02/27 10:00 Jan. Home Resales 6.24M 6.22M 02/27 10:00 Feb. Richmond Fed. Manf. -1.0 -11.0 02/28 8:30 4Q P GDP Price Index 1.5% 1.5% 02/28 8:30 4Q P Gross Domestic Product 2.3% 3.5% 02/28 10:00 Feb. Chicago Purchasers 50.0 48.8 02/28 10:00 Jan. New Home Sales 1.08M 1.12M 03/01 8:30 Feb. 17 Continuing Claims 2524K 2509K 03/01 8:30 Feb. 24 Initial Jobless Claims 325K 332K 03/01 8:30 Jan. Personal Income 0.3% 0.5% 03/01 8:30 Jan. Personal Spending 0.4% 0.7% 03/01 10:00 Jan. Construction Spending -0.5% -0.4% 03/01 10:00 Feb. ISM Manufacturing 50.0 49.3 03/01 10:00 Feb. ISM Prices 54.5 53.0 03/02 10:00 Feb. F Confidence- U. of MI 93.5 93.3 To contact the reporter on this story: Vince Golle in Washington at vgolle@bloomberg.net