Didn't that already come out with the unemployment release?
DATA SNAP: US 4Q GDP Unrevised At +3.0%; Below Expectations
Last update: 3/29/2012 8:30:00 AM
============================================================== Gross Domestic Product 4Q 4Q 3Q ! Consensus: ! Overall GDP Growth +3.0% +3.0% +1.8% ! +3.2%! PCE Price Index +1.2% +1.2% +2.3% ! Actual: ! ! +3.0%! ============================================================== By Tom Barkley and Jeffrey Sparshott Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--The U.S. economy expanded at its fastest rate in a year and a half in the final quarter of 2011, at an unrevised 3.0%, while corporate profits moderated from the previous quarter.
Gross domestic product, the broadest measure of all the goods and services produced in an economy, grew at an inflation-adjusted annual rate of 1.7% during all of 2011, the Commerce Department said Thursday in its third and final estimate for the quarter. The 2011 figure, also unrevised, marked a slowdown from the 3.0% rate of expansion in 2010.
The quarterly gain, while the strongest gain since the second quarter of 2008, came in below expectations. Economists surveyed by Dow Jones Newswires had forecast fourth-quarter GDP would be revised up to a 3.2% growth rate.
Company profits, which had remained strong amid a sluggish recovery in the overall economy, fell on a quarterly basis. Corporate profits--after tax and unadjusted for inventories or capital consumption--declined at a 0.5% annual rate from the previous quarter. Still, profits were up 11.7% year on year in the fourth quarter, Commerce said.
The economy ended the year on a relatively high note, as consumer spending picked up and companies restocked inventories to catch up with demand.
According to Thursday's revised data, stronger-than-expected business spending was offset by weaker exports. Non-residential fixed investment was revised up to a 5.2% gain, contributing 0.5 percentage point to GDP instead of 0.3 percentage point in the earlier estimate of fourth-quarter growth.
Exports expanded at a slower 2.7% pace instead of 4.3% as previously thought, resulting in a bigger drag on growth. Trade flows subtracted nearly 0.3 percentage point from GDP.
Commerce also revised down slightly its estimate of private inventories, which added 1.8 percentage point to GDP, instead of 1.9 percentage points in the previous estimate.
Consumer spending, grew 2.1% in the fourth quarter as thought, which was the best in three quarters.
Still, the economy is expected to moderate this year from the fourth-quarter pace, with high unemployment constraining consumer spending and inventories unlikely to provide as much of a boost. Steven Ricchiuto, chief economist at Mizuho Securities USA said Wednesday that recent data suggest the economy has lost steam since the beginning of the year, "due to a loss of upside momentum in consumer spending."
Gross domestic income, which calculates the income generated by economic activity rather than spending, also showed a pickup in the fourth quarter. GDI -- which some economists, including at the Federal Reserve, believe has provided a more accurate picture of the economy's performance since the recent recession hit -- jumped 4.4% in the fourth quarter after a 2.6% gain in the third quarter. That was the fastest gain since the first quarter of 2010.
For the full year, GDI was up 2.1% compared with 3.6% in 2010.
Fed officials predicted in January that the economy would grow between 2.2% and 2.7% in 2012. Despite continued improvement on the job and consumption front since then, Fed Chairman Ben Bernanke warned this week that it's "far too early to declare victory" and suggested that rates would have to remain low for a long time to ensure the recovery is sustainable.
The Fed chief also acknowledged that rising oil and gasoline prices were becoming a "major problem" that could cause inflation to tick up over the next few month and act as a drag on consumer spending. Higher gasoline prices have already shown up in recent inflation data, such as February's consumer price index, though core readings that exclude volatile energy and food costs have remained benign.
Thursday's report showed underlying price pressures were fairly tame at the end of the year. Core inflation, which is closely watched by the Fed, rose an unrevised 1.3% in the fourth quarter from the prior period.
The overall price index for personal consumption expenditures increased by 1.2% in the fourth quarter, which also matched the previous estimate.
Similarly, the price index for gross domestic purchases, which measures prices paid by U.S. residents, remained up 1.1%. The chain-weighted GDP price index was also unrevised at 0.9%.
The Commerce Department's release on GDP can be found at: bea.gov
-By Tom Barkley and Jeffrey Sparshott; Dow Jones Newswires; 202-862-9291; jeffrey.sparshott@dowjones.com
(END) Dow Jones Newswires
March 29, 2012 08:30 ET (12:30 GMT) |
