Final 4Q GDP Sees 4.3% Increase
Real gross domestic product increased at an annual rate of 4.3 percent in the fourth quarter, according to the “third” (final) estimate released by the Bureau of Economic Analysis.
In the third quarter, real GDP spiked by 33.4 percent.
In the third estimate, the change in fourth-quarter real GDP was revised up 0.2 percentage point from the second estimate from 4.1 percent. The updated estimates primarily reflected upward revisions to private inventory investment and state and local government spending that were partly offset by downward revisions to nonresidential fixed investment and consumer spending.
The report said the increase in real GDP reflected increases in exports, nonresidential fixed investment, personal consumption expenditures (PCE), residential fixed investment and private inventory investment, that were partly offset by decreases in state and local government spending as well as federal government spending (reflecting fewer fees paid to administer the Paycheck Protection Program loans). Imports, a subtraction in the calculation of GDP, increased.
“Whether measured by Gross Domestic Product or by Gross Domestic Income, the economy has not yet completely crawled out of the pandemic-induced hole into which it tumbled a year ago,” said Jay Bryson, Chief Economist with Wells Fargo Securities, Charlotte, N.C. “But, we expect the level of real GDP will surpass its pre-pandemic peak in the second quarter of this year.”