Photo: Stephen Brashear/Getty Images
UPDATE:New data out of the Bureau of Economic Analysis shows the U.S. economy expanded at a much faster pace than originally reported, jumping 20 basis points to 3.0 per cent.
Economists polled by Bloomberg forecast no change from the first reading of 2.8 per cent, and more than 35 per cent predicted a further revision lower.
“The upward revision to fourth-quarter GDP growth reflected an upward revision to consumer spending for services that was partly offset by a downward revision to consumer spending on goods, mainly nondurable goods. In addition, business investment was revised up, largely reflecting an upward revision to structures, and imports were revised down.” the BEA said in a statement.
Personal consumption was revised 20 basis points higher as well, to an annualized rate of 2.1 per cent. The GDP Price Index was corrected to a 0.9 per cent jump, from earlier estimates of 0.4 per cent. The Price Index gauges inflation during the year.
For the entire year, the BEA now says that the economy expanded by 1.7 per cent in 2011, down from the 3.0 per cent growth seen in 2010.
“The slowdown mainly reflected downturns in inventory investment and government spending,” the BEA said. “These contributions were partly offset by an upturn in net exports and a pickup in business investment.”
According to the agency, the decline in government spending was the greatest since 1971.
Below, a look at real GDP growth since the financial crisis began.
Photo: Bureau of Economic Analysis
The Bureau of Economic Analysis is minutes away from releasing the first revision to fourth quarter gross domestic product, with economists expecting the annualized pace to remain at 2.8 per cent.
Of the 82 economists polled by Bloomberg, slightly 35 per cent expect a downward revision, while 18 per cent see a correction higher.
Along with GDP, the BEA will provide a second reading of personal consumption. Consensus forecasts a 10 basis point revision lower, to 1.9 per cent from 2.0 per cent in the first reading.