BEA: Real GDP increased at 0.7% Annualized Rate in Q4 - InvestingChannel

BEA: Real GDP increased at 0.7% Annualized Rate in Q4

From the BEA: Gross Domestic Product: Fourth Quarter and Annual 2015 (Advance Estimate)

Real gross domestic product — the value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production, adjusted for price changes — increased at an annual rate of 0.7 percent in the fourth quarter of 2015, according to the “advance” estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 2.0 percent.

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

The deceleration in real GDP in the fourth quarter primarily reflected a deceleration in PCE and downturns in nonresidential fixed investment, in exports, and in state and local government spending that were partly offset by a smaller decrease in private inventory investment, a deceleration in imports, and an acceleration in federal government spending.
emphasis added

The advance Q4 GDP report, with 0.7% annualized growth, was below expectations of a 0.9% increase.

Personal consumption expenditures (PCE) increased at a 2.2% annualized ratein Q4, down from 3.0% in Q3.   Residential investment (RI) increased at a 8.1% pace. However equipment investment decreased at a 2.5% annualized rate, and investment in non-residential structures decreased at a 5.3% pace (due to the decline in oil prices).

The key negatives were investment in inventories (subtracted 0.45 percentage point), trade (subtracted 0.47 percentage point) and investment in nonresidential structures (subtracted 0.15 percentage points).

I’ll have more later …

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