US GDP Growth Revised Down to 2.2%


The United States economy advanced an annualized 2.2 percent in the fourth quarter of 2014, according to the second estimate released by the Bureau of Economic Analysis. The new figure comes below a 2.6 percent advance estimate, due to lower fixed investment and higher imports.

The deceleration in real GDP growth in the fourth quarter primarily reflected an upturn in imports, a downturn in federal government spending, and decelerations in nonresidential fixed investment and in exports that were partly offset by an acceleration in PCE, an upturn in private inventory investment, and an acceleration in state and local government spending.

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

Real personal consumption expenditures increased 4.2 percent in the fourth quarter, compared with an increase of 3.2 percent in the third.  Durable goods increased 6.0 percent, compared with an increase of 9.2 percent.  Nondurable goods increased 3.8 percent, compared with an increase of 2.5 percent.  Services increased 4.1 percent, compared with an increase of 2.5 percent.

Real nonresidential fixed investment increased 4.8 percent in the fourth quarter, compared with an increase of 8.9 percent in the third.  Investment in nonresidential structures increased 5.0 percent, compared with an increase of 4.8 percent.  Investment in equipment increased 0.9 percent, compared with an increase of 11.0 percent.  Investment in intellectual property products increased 10.9 percent, compared with an increase of 8.8 percent.  Real residential fixed investment increased 3.4 percent, compared with an increase of 3.2 percent.

Real exports of goods and services increased 3.2 percent in the fourth quarter, compared with an increase of 4.5 percent in the third.  Real imports of goods and services increased 10.1 percent, in contrast to a decrease of 0.9 percent.

Real federal government consumption expenditures and gross investment decreased 7.5 percent in the fourth quarter, in contrast to an increase of 9.9 percent in the third.  National defense decreased 12.4 percent, in contrast to an increase of 16.0 percent.  Nondefense increased 1.4 percent, compared with an increase of 0.4 percent.  Real state and local government consumption expenditures and gross investment increased 2.0 percent, compared with an increase of 1.1 percent.

The change in real private inventories added 0.12 percentage point to the fourth-quarter change in real GDP after subtracting 0.03 percentage point from the third-quarter change.  Private businesses increased inventories $88.4 billion in the fourth quarter, following increases of $82.2 billion in the third quarter and $84.8 billion in the second.

US GDP Growth Revised Down to 2.2%


BEA | Joana Taborda | joana.taborda@tradingeconomics.com
2/27/2015 1:41:58 PM