Friday, January 29, 2016

Fourth Quarter GDP Reoport

Eceonomic forecasters expected fourth quarter growth to come in weakly, and according to the figures released this morning by the Commerce Department, they were right on target. GDP grew at 0.7 percent in the fourth quarter, down from 2 percent in the third quarter and 3.9 percent in the second quarter. All told, the economy expanded at a rate of 2.4 percent for 2015. That's exactly the same rate that we saw in 2014.

Commerce attributed the slowing growth to a deceleration in consumer purchasing, which dropped from 2.2 percent growth in the third quarter to 1.1 percent in the fourth. Other factors included downturns in commercial real estate, exports, and state and local government spending.

The positive factors: The decrease in private inventory investment was smaller than in the previous quarter. We also saw  a deceleration in imports, and an acceleration in federal government spending.

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