The first reading of Gross Domestic Product (GDP) for the fourth quarter of last year showed that the U.S. economy grew by 2.9% annualized, which was higher than estimates. Note that this is the first of three readings and there can be significant revisions when the second and final readings are released on February 23 and March 30, respectively.

What’s the bottom line? GDP functions as a scorecard for the country’s economic health. Last year, GDP was negative for both the first and second quarters before turning positive in the third. While the positive initial reading for the fourth quarter sounds like good news, there is more to the data than this headline number.

Looking at the internals, inventory build played a big role in the overall figure. Recent data showed that Personal Spending declined in November and December while Retail Sales were weak during the holiday shopping season, leaving companies with excess inventory. As a result, companies may start to slash prices, which could become a drag on the economy and impact GDP in the first and second quarters of this year.