The U.S. economy’s growth rate last quarter was revised slightly downward as inventories subtracted more than previously estimated, Commerce Department data showed Wednesday.
Highlights of Fourth-Quarter GDP (Second Estimate)
Gross domestic product grew at a 2.5% annualized rate (matching est.), revised from 2.6% and after 3.2% gain in prior quarter
Consumer spending, the biggest part of the economy, grew an unrevised 3.8% (est. 3.6%) after 2.2% gain in previous quarter
Nonresidential fixed investment expanded 6.6%, revised from 6.8% gain; downward revision reflected smaller gain in intellectual property
Inventories subtracted 0.7 percentage point from GDP, more than the 0.67 percentage point initially estimated; farm inventories were revised lower due to fresh data from Dept. of Agriculture
The latest results for GDP, the value of all goods and services produced in the U.S., show the economy ended the year on a solid note, despite the downward revision. Household and business spending remained robust.
Consumer spending, which accounts for about 70 percent of the economy, was the biggest contributor of growth in the fourth quarter, adding 2.58 percentage points.
Business outlays were also solid, contributing 0.82 percentage point to growth. The latest results were boosted by residential investment and government spending as well.
Final sales to domestic purchasers, which strip out trade and inventories -- the two most volatile components of the GDP calculation -- climbed an unrevised 4.3 percent, the strongest since the third quarter of 2014.
Price data in the GDP report showed inflation near the Federal Reserve’s 2 percent goal. Excluding food and energy, the Fed’s preferred price index tied to personal spending rose an unrevised 1.9 percent.
Source : Bloomberg