Q4 GDP Revised Down To 5.6%

Down from over 5.9% in the last reading…

Here’s part of the announcement from the BEA:

     Real gross domestic product — the output of goods and services produced by labour and property
located in the United States — increased at an annual rate of 5.6 per cent in the fourth quarter of 2009,
(that is, from the third quarter to the fourth quarter), according to the “third” estimate released by the
Bureau of Economic Analysis.  In the third quarter, real GDP increased 2.2 per cent.

      The GDP estimate released today is based on more complete source data than were available for
the “second” estimate issued last month.  In the second estimate, the increase in real GDP was 5.9
per cent (see “Revisions” on page 3).

      The increase in real GDP in the fourth quarter primarily reflected positive contributions from
private inventory investment, exports, personal consumption expenditures (PCE), and nonresidential
fixed investment.  Imports, which are a subtraction in the calculation of GDP, increased.

      The acceleration in real GDP in the fourth quarter primarily reflected an acceleration in private
inventory investment, an upturn in nonresidential fixed investment, an acceleration in exports, and a
deceleration in imports that were partly offset by decelerations in PCE and in federal government
spending.

      Motor vehicle output added 0.45 percentage point to the fourth-quarter change in real GDP after
adding 1.45 percentage points to the third-quarter change.  Final sales of computers added 0.01
percentage point to the fourth-quarter change in real GDP after subtracting 0.08 percentage point from
the third-quarter change.

The price index for gross domestic purchases, which measures prices paid by U.S. residents,
increased 2.0 per cent in the fourth quarter, 0.1 percentage point more than in the second estimate; this
index increased 1.3 per cent in the third quarter.  Excluding food and energy prices, the price index for
gross domestic purchases increased 1.5 per cent in the fourth quarter, compared with an increase of 0.3
per cent in the third.

      Real personal consumption expenditures increased 1.6 per cent in the fourth quarter, compared
with an increase of 2.8 per cent in the third.  Real nonresidential fixed investment increased 5.3 per cent,
in contrast to a decrease of 5.9 per cent.  Nonresidential structures decreased 18.0 per cent, compared
with a decrease of 18.4 per cent.  Equipment and software increased 19.0 per cent, compared with an
increase of 1.5 per cent.  Real residential fixed investment increased 3.8 per cent, compared with an
increase of 18.9 per cent.

      Real exports of goods and services increased 22.8 per cent in the fourth quarter, compared with
an increase of 17.8 per cent in the third.  Real imports of goods and services increased 15.8 per cent,
compared with an increase of 21.3 per cent.

      Real federal government consumption expenditures and gross investment were unchanged in the
fourth quarter, compared with an increase of 8.0 per cent in the third.  National defence decreased 3.6
per cent, in contrast to an increase of 8.4 per cent.  Nondefense increased 8.3 per cent, compared with an
increase of 7.0 per cent.  Real state and local government consumption expenditures and gross
investment decreased 2.2 per cent, compared with a decrease of 0.6 per cent.

      The change in real private inventories added 3.79 percentage points to the fourth-quarter change
in real GDP, after adding 0.69 percentage point to the third-quarter change.  Private businesses
decreased inventories $19.7 billion in the fourth quarter, following decreases of $139.2 billion in the
third quarter and $160.2 billion in the second.

      Real final sales of domestic product — GDP less change in private inventories — increased 1.7
per cent in the fourth quarter, compared with an increase of 1.5 per cent in the third.

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