United States gross domestic product increased 1.9 percent in the fourth quarter of 2016, according to the “second” estimate from the Department of Commerce, down from a 3.5 percent growth rate in the third quarter.
Source: Sean K s/ Shutterstock
U.S. GDP grew 1.9 percent during fourth quarter 2016, according to the “second” estimate from the Department of Commerce.
United States gross domestic product (GDP) – the broadest measure of a nation’s overall economic health – grew 1.9 percent during fourth quarter 2016, according to the “second” estimate from the Department of Commerce.
Commerce’s most recent estimate is the same as its “advance” estimate issued in January.
U.S. GDP grew at a revised 3.5 percent rate in the third quarter, a 1.4 percent rate in the second quarter, and a 0.8 percent rate in the first quarter of 2016. GDP is a calculation of the value of the goods and services produced by a nation’s economy minus the value of the goods and services used up in production.
The 3.5 percent growth rate in Q3 was the strongest since third quarter 2014, beating consensus analyst expectations of a revised 3.3 percent expansion pace.
The Commerce Department’s Bureau of Economic Analysis (BEA) said the deceleration in GDP growth primarily reflected decreases in exports and federal government spending, and an increase in imports, which are a subtraction in the calculation of GDP. These factors were offset in part by increases in residential fixed investment, private inventory investment, and state and local government spending.
Real exports of goods and services fell 4 percent in the fourth quarter, according to BEA, compared with a 10 percent increase in the third quarter. Imports, meanwhile, shot up 8.5 percent following a 2.2 percent increase the previous quarter.
In more encouraging news for the U.S. economy, the most recent data from Commerce indicates new orders for durable goods in January 2017 grew 1.8 percent percent to $230.4 billion following a revised 0.8 percent decrease in December.
The December decrease was the second in as many months, but came on the heels of four consecutive monthly increases. Durable goods orders fell 4.8 percent in November after growing 4.8 percent in October, 0.4 percent in September and 0.3 percent in August.
Census noted that transportation equipment, up following two consecutive monthly decreases, drove the increase in durable goods orders, rising 6 percent to $76.4 billion for the month. Excluding orders for transportation equipment, total durable goods orders slipped 0.2 percent in January.
Shipments of manufactured durable goods, on the other hand, following two consecutive monthly increase, dropped 0.1 percent to $238.3 billion in January following a revised 1.6 percent bump in December.