Final Estimate of 4Q GDP Sees 2.6% Growth

Real gross domestic product increased at an annual rate of 2.6 percent in the fourth quarter, according to the third (final) estimate Thursday by the Bureau of Economic Analysis.

In the third quarter, real GDP increased 3.2 percent. The final estimated derived from more complete source data than were available for the second estimate issued last month. In the second estimate, the increase in real GDP was 2.7 percent. The revision primarily reflected downward revisions to exports and consumer spending. Imports, which are a subtraction in the calculation of GDP, were revised down.

BEA said the increase in real GDP primarily reflected increases in private inventory investment, consumer spending, nonresidential fixed investment, federal government spending and state and local government spending, partly offset by decreases in residential fixed investment and exports. Imports decreased.

“The reported real GDP growth rate overstates the strength of the economy at the end of last year,” said Jay Bryson, Chief Economist with Wells Fargo Economics, Charlotte, N.C. “Real consumer spending grew only 1.0%, and an inventory build boosted topline GDP growth by 1.5 percentage points.”