{"id":246522,"date":"2010-01-29T09:20:07","date_gmt":"2010-01-29T14:20:07","guid":{"rendered":"tag:business.theatlantic.com,2010:\/\/3.34970"},"modified":"2010-01-29T11:06:02","modified_gmt":"2010-01-29T16:06:02","slug":"u-s-gdp-grew-by-5-7-in-the-4th-quarter","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/246522","title":{"rendered":"U.S. GDP Grew By 5.7% In The 4th Quarter"},"content":{"rendered":"

The U.S. Department of Commerce released<\/a> its preliminary 4th Quarter GDP calculation today. It looks pretty good. GDP grew by a whopping 5.7% annualized pace during the quarter, the fastest growth the U.S. has seen since 2003. That’s the second quarter of positive income growth, and significantly better than the 3rd quarter’s 2.2% growth. Let’s dig into the report.<\/p>\n

First, a disclaimer: 4th quarter GDP may not have been 5.7%. In fact, it’s very likely it wasn’t. This is just the first estimate, and there are two more revisions to come before the number is final. You may recall<\/a> that 3rd quarter GDP started at 3.5% in its first estimate, only to be revised downward twice, to eventually settle at a much more mild 2.2% rate. <\/p>\n

So let’s look at what makes up the 4th quarter’s growth. As it turns out, personal consumption actually did worse in the 4th quarter than the prior. It made up 1.4%, versus 2.0% in the 3rd quarter. Within that, goods did worse than services, adding 0.6% and 0.8% growth, respectively. As for those goods, Auto sales actually brought down the quarter’s GDP by 0.6%, compared to adding 1.45% in the 3rd quarter.<\/p>\n

Gross private domestic investment played a huge role, accounting for 3.8% of the growth. That compares to a measly 0.5% rate in the 3rd quarter. The largest component comes from the change in real private inventories. It made up 3.4% of the 5.7% growth. That’s a vastly larger contribution than in the third quarter, when this component made up just 0.7%. Businesses didn’t liquidate their inventories as much in the 4th quarter as in the 3rd. This means that final sales made up the other approximately 2.2% of the 5.7% growth.<\/p>\n

Another thing to note about the investment contribution: it had more to do with nonresidential than residential fixed investment. Business investment added 0.3%, up from a decline of 0.2% in Q3. Meanwhile residential investment accounted for only 0.1% — that’s down from a 0.4% contribution in the 3rd quarter. <\/p>\n

Net exports were positive, accounting for 0.5% of the quarter’s GDP. This is also better than Q3, when they resulted in a 0.8% decline. <\/p>\n

So this is good news, but, again, we don’t know what the final number will actually be. I would also suggest holding off on popping the champagne to celebrate a robust U.S. economy. Most economists predicted a healthy rate of GDP in Q4-2009, but expect that to decline from there to more moderate levels through 2010. And unemployment is also expected to hover near double-digits throughout the year.<\/p>\n



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The U.S. Department of Commerce released its preliminary 4th Quarter GDP calculation today. It looks pretty good. GDP grew by a whopping 5.7% annualized pace during the quarter, the fastest growth the U.S. has seen since 2003. That’s the second quarter of positive income growth, and significantly better than the 3rd quarter’s 2.2% growth. Let’s […]<\/p>\n","protected":false},"author":1535,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-246522","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/246522","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/1535"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=246522"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/246522\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=246522"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=246522"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=246522"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}