U.S. GDP Annual Rate For Fourth Quarter Registers 2.6% Increase, Bureau of Economic Analysis Reports

By  //  January 26, 2018

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Real gross domestic product (GDP) increased at an annual rate of 2.6 percent in the fourth quarter of 2017, according to the “advance” estimate released by the Bureau of Economic Analysis. (Fox Business Image)

Real gross domestic product (GDP) increased at an annual rate of 2.6 percent in the fourth quarter of 2017, according to the “advance” estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 3.2 percent.

The Bureau emphasized that the fourth-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency.

The “second” estimate for the fourth quarter, based on more complete data, will be released on February 28, 2018.

The increase in real GDP in the fourth quarter reflected positive contributions from personal consumption expenditures (PCE), nonresidential fixed investment, exports, residential fixed investment, state and local government spending, and federal government spending that were partly offset by a
negative contribution from private inventory investment. Imports, which are a subtraction in the calculation of GDP, increased.

The deceleration in real GDP growth in the fourth quarter reflected a downturn in private inventory investment that was partly offset by accelerations in PCE, exports, nonresidential fixed investment, state and local government spending, and federal government spending, and an upturn in residential fixed investment. Imports, which are a subtraction in the calculation of GDP, turned up.

Current-dollar GDP increased 5.0 percent, or $238.3 billion, in the fourth quarter to a level of $19,738.9 billion. In the third quarter, current-dollar GDP increased 5.3 percent, or $250.6 billion.

The price index for gross domestic purchases increased 2.5 percent in the fourth quarter, compared with an increase of 1.7 percent in the third quarter. The PCE price index increased 2.8 percent, compared with an increase of 1.5 percent. Excluding food and energy prices, the PCE price index increased 1.9 percent, compared with an increase of 1.3 percent.

Personal Income

Current-dollar personal income increased $178.9 billion in the fourth quarter, compared with an increase of $112.3 billion in the third. The acceleration in personal income primarily reflected an upturn in personal interest income and an acceleration in nonfarm proprietors’ income.

Disposable personal income increased $139.0 billion, or 3.9 percent, in the fourth quarter, compared with an increase of $73.8 billion, or 2.1 percent, in the third. Real disposable personal income increased 1.1 percent, compared with an increase of 0.5 percent.

Personal saving was $384.4 billion in the fourth quarter, compared with $478.3 billion in the third. The personal saving rate — personal saving as a percentage of disposable personal income — was 2.6 percent in the fourth quarter, compared with 3.3 percent in the third.

2017 GDP

Real GDP increased 2.3 percent in 2017 (that is, from the 2016 annual level to the 2017 annual level), compared with an increase of 1.5 percent in 2016 (table 1).

The increase in real GDP in 2017 primarily reflected positive contributions from PCE, nonresidential fixed investment, and exports. Imports, which are a subtraction in the calculation of GDP, increased.

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The acceleration in real GDP from 2016 to 2017 reflected upturns in nonresidential fixed investment and in exports and a smaller decrease in private inventory investment. These movements were partly offset by decelerations in residential fixed investment and in state and local government spending. Imports, which are a subtraction in the calculation of GDP, accelerated.

Current-dollar GDP increased 4.1 percent, or $762.3 billion, in 2017 to a level of $19,386.8 billion, compared with an increase of 2.8 percent, or $503.8 billion, in 2016 .

The price index for gross domestic purchases increased 1.8 percent in 2017, compared with an increase of 1.0 percent in 2016 (table 4). The PCE price index increased 1.7 percent, compared with an increase of 1.2 percent. Excluding food and energy prices, the PCE price index increased 1.5 percent, compared with an increase of 1.8 percent.

During 2017 (measured from the fourth quarter of 2016 to the fourth quarter of 2017), real GDP increased 2.5 percent, compared with an increase of 1.8 percent during 2016. The price index for gross domestic purchases increased 1.9 percent during 2017, compared with an increase of 1.4 percent during 2016.

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