US Q4 GDP grew at 3.2%, full-year 2010 GDP growth was 2.9%

28 January 2011 14:41  [Source: ICIS news]

WASHINGTON (ICIS)--The US economy grew by 3.2% in the fourth quarter of 2010, the Department of Commerce (DOC) said on Friday, indicating that the nation’s economic recovery was again gaining strength compared with the third-quarter rate of 2.6%.

In its first estimate, the department said that US GDP in the final three months of 2010 was at a seasonally adjusted annual figure of $14,870.4bn (€10,855.4bn), compared with the third-quarter output of all goods and services at $14,745.1bn.

The GDP gain in the fourth quarter was attributed chiefly to an increase in what the department calls “personal consumption expenditures”, also known as consumer spending.

The department said that consumer spending in the fourth quarter grew by 4.4%, compared with an increase of 2.4% in the third quarter.

Export trade also contributed to the improvement, growing by 8.5% in the final three months of the year compared with the third-quarter growth rate of 6.8%.

Non-residential fixed investment - which includes construction of office buildings, shopping malls, schools and roads - saw a fourth-quarter advance of 4.4%, but that pace was slower than the 10% growth rate in the third quarter.

The advances in consumer spending and export trade were in part offset by a narrow 0.2% decline in federal government spending, compared with 8.8% growth in government outlays in the third quarter.

For the full year 2010, the department said that the nation had GDP growth of 2.9%, only slightly better than the 2.6% pace of GDP expansion in 2009.

The US economic recovery from the recession was officially pegged as having begun in June 2009.  The nation’s GDP shot up by 5.6% in the final quarter of 2009, then eased back to 3.7% growth in the first quarter of 2010.

The recovery cooled to a 1.7% rate of GDP growth in the second quarter of last year, then picked up again in the third quarter to a revised 2.6%.

Economists are anticipating that the US economic recovery would continue to gain strength through this year to reach a full-year GDP growth rate of 3.2% or higher.

In normal economic times, the US economy would be expected to grow at an annual rate of 3% to 3.5%.

But while a full-year 2011 GDP expansion rate of 3.2% or better ordinarily might be regarded as normal, the ongoing modest pace of the recovery has not generated the kind of job growth that has been associated with earlier post-recession build-ups.

The fourth-quarter GDP figures may be revised when the department, drawing on more complete data, issues its second estimate of the period's performance on 25 February.

($1 = €0.73)

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By: Joe Kamalick
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