The U.S. Commerce Department’s Bureau of Economic Analysis on Friday released the advance estimate of gross domestic product (GDP) for the fourth quarter of 2009. Real GDP rose 5.7% at an annual rate, the second consecutive advance and the strongest increase since the third quarter of 2003.
“Today’s strong GDP showing represents important economic progress that must now be translated into new jobs,” Commerce Secretary Gary Locke said. “Further Recovery Act spending, measures like the $5,000 small business tax credit President Obama announced today and growing confidence among U.S. businesses will help put Americans back to work.”
The pick up in real GDP growth reflected a slowdown in the rate at which businesses drew down inventories. While businesses reduced inventories for the seventh straight quarter, the drawdown was much less than in the third quarter. The pick up also reflected a upturn in business investment, mainly due to a pick up in equipment and software. In addition, imports – a subtraction in the calculation of GDP – rose less than in the third quarter.
These contributions to real GDP growth were partially offset by slowdowns in federal spending, consumer spending, and residential housing, the Bureau of Economic Analysis reported.
Real disposable personal income – adjusted for inflation and taxes – rose 2.1% in the fourth quarter after falling 1.4% in the third quarter. The personal savings rate rose to 4.6% in the fourth quarter from 4.5% in the third.
U.S. consumers paid 2.1% more for goods and services in the fourth quarter after a 1.3% price increase in the third. Energy prices fell somewhat, but the price of food increased. Excluding food and energy, the price of goods and services rose 1.2% in the fourth quarter after a .3% increase in the third.
For all of 2009, real GDP declined 2.4% after growing .4% in 2008. The decline in 2009 reflected downturns in business investments and exports, and larger declines in inventory investments and consumer spending.
Source:
U.S. Department of Commerce
