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Economy in Brief

U.S. GDP Growth Is Revised Up
by Tom Moeller February 29, 2012

Economic growth last quarter was slightly higher than originally estimated. The Commerce Department indicated that Q4'11 real GDP grew at a 3.0%  annual rate, revised from 2.8%. Expectations had been for an unchanged 2.8% rise. Growth last quarter remained the strongest since Q2'10. An unrevised 1.9 percentage point contribution to growth from faster inventory accumulation remained the main impetus for Q4 growth. That contribution followed a subtraction from growth during three of the prior four quarters. Foreign trade subtracted an unrevised 0.1 percentage points from growth as exports rose at a 4.3% rate (5.1% y/y) and imports rose 3.8% (3.6% y/y).

Domestic final sales growth was revised minimally higher to 1.1% (1.5% y/y), mostly due to a raised estimate of growth in business fixed investment to 2.8% (7.6% y/y). Growth in personal consumption expenditures of 2.1% (1.7% y/y) was little-changed and still the weakest gain since Q1'10. Residential investment growth also was improved to 11.5% (3.5% y/y) and was the strongest since Q2'10 when growth was fueled by a government subsidy to home buyers. The decline in government spending was little-changed at -4.4% (-2.8% y/y).

Price inflation as measured by the chain-type price index was raised to 0.9% from 0.4% but was still the weakest since Q3'09. The PCE price index rose at a modest 1.2% rate (2.7% y/y). However, full-year growth in the index of 2.5% was the strongest since 2008 due to strength in food and energy prices.

The latest GDP figures can be found in Haver's USECON and USNA databases; USNA contains basically all of the Bureau of Economic Analysis' detail on the national accounts, including the new integrated economics accounts and the recently added GDP data for U.S. Territories. The Consensus estimates can be found in AS1REPNA.

Today's testimony by Fed Chairman Ben S. Bernanke can be found here.

Chained 2005 $, % AR Q4'11 (2nd) Q4'11 (Adv) Q3'11 Q2'11 Q4'11
Y/Y
2011 2010 2009
Gross Domestic Product 3.0 2.8 1.8 1.3 1.6 1.7 3.0 -3.5
  Inventory Effect 1.9 1.9 -1.4 -0.3 0.1 -0.2 1.6 -0.9
Final Sales 1.1 0.8 3.2 1.6 1.5 1.9 1.4 -2.6
  Foreign Trade Effect -0.1 -0.1 0.4 0.2 0.1 0.1 -0.4 1.0
Domestic Final Sales 1.1 0.9 2.7 1.3 1.4 1.8 1.8 -3.6
Demand Components
Personal Consumption 2.1 2.0 1.7 0.7 1.7 2.2 2.0 -1.9
Business Fixed Investment 2.8 1.7 15.7 10.3 7.6 8.7 4.4 -17.9
Residential Investment 11.5 10.9 1.2 4.2 3.5 -1.4 -4.3 -22.2
Government Spending -4.4 -4.6 -0.1 -0.9 -2.8 -2.1 0.7 1.7
Chain-Type Price Index
GDP 0.9 0.4 2.6 2.5 2.1 2.1 1.2 1.1
Final Sales of Domestic Product 0.9 0.4 2.6 2.5 2.1 2.1 1.2 1.0
Final Sales to Domestic Purchasers 1.1 0.8 2.0 3.4 2.6 2.5 1.5 -0.1
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