The U.S. Bureau of Economic Analysis has reported that U.S. gross domestic product grew at an annual rate of 2.8 percent in the fourth quarter of 2011. This was higher than the 1.8 percent growth seen in the third quarter, but disappointing, as many economists believed growth would top 3 percent in the quarter.
Positive contributions to GDP growth came from private inventory investment, consumer spending and residential fixed investment. However, reductions in federal, state and local government spending continue to be a large drag on GDP growth. Also, an increase in imports, which are a subtraction in the GDP calculation, had a negative effect.
The price index increased 0.8 percent in the fourth quarter of 2011, compared to a 2 percent increase in the third quarter. Lower energy prices were the main difference between quarters.
Consumer spending increased 2 percent in the fourth quarter, compared to a 1.7 percent gain in the third quarter. Purchases of durable goods led the way with a 14.8 percent gain in the fourth quarter, compared to a 5.7 percent increase in the third quarter.
Government spending dropped 7.3 percent in the fourth quarter. In the third quarter, government spending increased 2.1 percent.
For the full-year 2011, real GDP gained only 1.7 percent, compared with a 3.0 percent increase in 2010. Despite the slower growth, however, prices accelerated at a faster pace. The price index in 2011 rose 2.5 percent, compared to a 1.5 percent increase in 2010.
For more information, please click on the Economic Growth Statistics page in the menu bar.
Gregg D. Killoren
victoria1014
