United States: Growth accelerates in Q4
January 28, 2011
In the fourth quarter, GDP expanded at a seasonally adjusted annualised rate of 3.2%, according to the 28 January estimate released by the Bureau of Economic Analysis (BEA). The figure represented an acceleration from the 2.6% expansion tallied in Q3 but was below market expectations of 3.5% growth. Moreover, economic growth rebounded from a 2.6% contraction in 2009 to a 2.9% expansion in the full year 2010. The pick-up in the fourth quarter reflected an improving contribution of net exports. Personal consumption expenditures accelerated from a 2.4% expansion in the third quarter to a 4.4% increase. Meanwhile, gross fixed investment accelerated from growth of 1.5% to expand 4.2%, as residential investment swung from the 27.3% plunge in Q3 to 3.4% expansion in the final quarter of the year. On a negative note, the fourth quarter figure was dragged down by a 3.7 percentage-point detraction from inventories to overall economic growth. Exports of goods and services expanded 8.5% in Q4, buttressed by stronger merchandise trade. In contrast, imports contracted severely, declining 13.6% in Q4 after an expansion of 16.8% in Q3. As a result, the net contribution from the external sector to overall growth rebounded from minus 1.7 percentage points in the third quarter to plus 3.4 percentage points in the fourth. The Federal Reserve expects the economy to grow between 3.0% and 3.6% in 2011 and between 3.6% and 4.5% in 2012.