WASHINGTON – The nation’s real gross domestic product rose at an annual rate of 2.5 percent in the fourth quarter, outpacing the previous quarter’s 2.0 percent gain, in final figures released today by the U.S. Department of Commerce’s Bureau of Economic Analysis.
For all of 2006, the GDP grew 3.3 percent, the same as previously estimated, compared with 3.2 percent in 2005.
The final GDP report for the fourth quarter lagged the BEA’s initial estimate of 3.5 percent, but exeeded last month’s revised estimate of 2.2 percent.
The GDP is the total goods and services produced by labor and property in the United States. The BEA credited the increase to rises in personal consumption expenditures (PCE), exports and government spending that were partly offset by a rise in imports and declines in housing investment and private-inventory investment.
Real residential fixed investment – housing construction – fell 19.8 percent in the fourth quarter, after falling 18.7 percent in the third quarter, while nonresidential construction fell 3.1 percent after rising 10 percent in the previous quarter.
Current-dollar GDP – the market value of the nation’s goods and services output – increased 4.1 percent in the fourth quarter to $13.46 trillion after rising 3.8 percent in the third quarter.
The price index for gross domestic purchases edged up 0.2 percent in the fourth quarter, after rising 2.0 percent in the previous quarter. Excluding food and energy, the index rose 2.4 percent, after rising 2.2 percent in the third quarter.
Real personal consumption expenditures increased 4.2 percent in the fourth quarter, accelerating from the previous quarter’s 2.8-percent gain.
“There is no question growth will be slower this quarter and the next,” Nariman Behravesh, chief economist at Global Insight Inc. in Lexington, Mass., told Bloomberg News. “Housing is looking to be in a deeper downturn and capital spending is looking quite weak. [But] employment growth is enough to keep consumers spending.”
Additional information is available at www.bea.gov.
