FEATURED IMAGE shows Houston Ship Channel Barbours, Photo by U.S. Army Corps of Engineers via Wikimedia Commons
U.S. economy grew at 1.9 percent of GDP in the fourth quarter of 2016, showing no change from earlier estimates, though consumer spending registered a marked increase, the Commerce Department said Tuesday.
According to the “second” estimate released by the Bureau of Economic Analysis, in the third quarter, real GDP increased 3.5 percent.
In the year 2016, real GDP increased 1.6 percent, from the 2015 annual level to the 2016 annual level, compared with an increase of 2.6 percent in 2015.
In 2017, the Donald Trump Administration is looking to boost the American economy with a range of policy measures including tax reforms, minimization of regulations and a boost in infrastructure spending. The slower growth of the last year indicates challenges persisting in various sectors.
But “with the second estimate for the fourth quarter, the general picture of economic growth remains the same,” the Department says noting that the increase in personal consumption expenditures was larger and increases in state and local government spending and in nonresidential fixed investment were smaller than previously estimated,” the Department said.
The expansion in real GDP in the fourth quarter reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, residential fixed investment, nonresidential fixed investment, and state and local government spending, the Department revealed.
But these increases were partly offset by negative contributions from exports and federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.
Moreover, the deceleration in real GDP in the fourth quarter primarily reflected a downturn in exports, an acceleration in imports, and a downturn in federal government spending that were partly offset by an upturn in residential fixed investment, an acceleration in private inventory investment, and an upturn in state and local government spending.
Current-dollar GDP increased 3.9 percent, or $180.2 billion, in the fourth quarter to a level of $18,855.5 billion. In the third quarter, current-dollar GDP increased 5.0 percent, or $225.2 billion
The price index for gross domestic purchases increased 1.9 percent in the fourth quarter, compared with an increase of 1.5 percent in the third quarter while the PCE price index increased 1.9 percent, compared with an increase of 1.5 percent. Excluding food and energy prices, the PCE price index increased 1.2 percent, compared with an increase of 1.7 percent (
Overall in the year 2016, real GDP increased 1.6 percent, from the 2015 annual level.
“The increase in real GDP in 2016 reflected positive contributions from PCE, residential fixed investment, state and local government spending, exports, and federal government spending that were partly offset by negative contributions from private inventory investment and nonresidential fixed investment.”
On the other hand, imports, which are a subtraction in the calculation of GDP, increased.
Here are some more details as released by the Department of Commerce:
The deceleration in real GDP from 2015 to 2016 reflected downturns in private inventory investment and in nonresidential fixed investment and decelerations in PCE, in residential fixed investment and in state and local government spending that were partly offset by a deceleration in imports and accelerations in federal government spending and in exports.
Current-dollar GDP increased 2.9 percent, or $529.0 billion, in 2016 to a level of $18,565.6 billion, compared with an increase of 3.7 percent, or $643.5 billion, in 2015.
The price index for gross domestic purchases increased 1.0 percent in 2016, compared with an increase of 0.4 percent in 2015.
During 2016 (that is, measured from the fourth quarter of 2015 to the fourth quarter of 2016), real GDP increased 1.9 percent, the same rate as during 2015. The price index for gross domestic purchases increased 1.4 percent during 2016, compared with an increase of 0.4 percent during 2015.
