Economic growth was revised down in the second look at the October-December period. The quarterly change now stands at minus 0.4 percent, doubling the decline originally reported and shaving annual workday adjusted growth from its provisional 1.1 percent to 0.9 percent. Unadjusted, the yearly rate was just 0.3 percent.

The overall contraction was driven by a 1.0 percent drop in household spending, compounded by a 0.8 percent fall in gross fixed capital formation. Investment in machinery and equipment (minus 3.6 percent) and construction (minus 2.9 percent) were especially weak. Elsewhere, government spending (0.6 percent) provided a limited boost as did business inventories which added 0.3 percentage points. Consequently, domestic demand was down fully 0.6 percent.

Net foreign trade was broadly flat, adding only 0.1 percentage point as exports (minus 1.0 percent) fell by less than imports (minus 1.3 percent).

Although the current quarter seems to have got off to a reasonable start, the revised fourth quarter results boost the chances of a German recession and make for downside risk to the final fourth quarter Eurozone GDP report. They also trim the German ECDI to 7 and the ECDI-P to exactly zero. Both readings suggest that economic activity in general is currently moving at least broadly in line with market expectations.

No revisions are expected to the provisional data.

Gross domestic product (GDP) is the broadest measure of aggregate economic activity and encompasses every sector of the economy. Following the release of the flash estimate about two weeks earlier, the second report incorporates additional data to provide a more accurate reading. It also contains details of the key GDP expenditure components and full national accounts.

GDP is the all-inclusive measure of economic activity. Investors need to closely track the economy because it usually dictates how investments will perform. Stock market Investors like to see healthy economic growth because robust business activity translates to higher corporate profits. The GDP report contains information which not only paints an image of the overall economy, but tells investors about important trends within the big picture. These data, which follow the international classification system (SNA93), are readily comparable to other industrialized countries. GDP components such as consumer spending, business and residential investment illuminate the economy's undercurrents, which can translate to investment opportunities and guidance in managing a portfolio.

Each financial market reacts differently to GDP data because of their focus. For example, equity market participants cheer healthy economic growth because it improves the corporate profit outlook while weak growth generally means anemic earnings. Equities generally drop on disappointing growth and climb on good growth prospects.

Bond or fixed income markets are contrarians. They prefer weak growth so that there is less of a chance of higher central bank interest rates and inflation. When GDP growth is poor or negative it indicates anemic or negative economic activity. Bond prices will rise and interest rates will fall. When growth is positive and good, interest rates will be higher and bond prices lower. Currency traders prefer healthy growth and higher interest rates. Both lead to increased demand for a local currency. However, inflationary pressures put pressure on a currency regardless of growth.