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Real gross domestic product -- the value of the production of goods and services in the United States, adjusted for price changes -- increased at an annual rate of 2.6 percent in the fourth quarter of 2014, according to the "advance" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 5.0 percent.
The Bureau emphasized that the fourth-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 4 and "Comparisons of Revisions to GDP" on page 5). The "second" estimate for the fourth quarter, based on more complete data, will be released on February 27, 2015.
The increase in real GDP in the fourth quarter reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, exports, nonresidential fixed investment, state and local government spending, 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.
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 upturn in private inventory investment and an acceleration in PCE.
The price index for gross domestic purchases, which measures prices paid by U.S. residents, decreased 0.3 percent in the fourth quarter, in contrast to an increase of 1.4 percent in the third. Excluding food and energy prices, the price index for gross domestic purchases increased 0.7 percent, compared with an increase of 1.6 percent.
FOOTNOTE. Quarterly estimates are expressed at seasonally adjusted annual rates, unless otherwise specified. Quarter-to-quarter dollar changes are differences between these published estimates. Percent changes are calculated from unrounded data and are annualized. "Real" estimates are in chained (2009) dollars. Price indexes are chain-type measures.
Real personal consumption expenditures increased 4.3 percent in the fourth quarter, compared with an increase of 3.2 percent in the third. Durable goods increased 7.4 percent, compared with an increase of 9.2 percent. Nondurable goods increased 4.4 percent, compared with an increase of 2.5 percent. Services increased 3.7 percent, compared with an increase of 2.5 percent.
Real nonresidential fixed investment increased 1.9 percent in the fourth quarter, compared with an increase of 8.9 percent in the third. Investment in nonresidential structures increased 2.6 percent, compared with an increase of 4.8 percent. Investment in equipment decreased 1.9 percent, in contrast to an increase of 11.0 percent. Investment in intellectual property products increased 7.1 percent, compared with an increase of 8.8 percent. Real residential fixed investment increased 4.1 percent, compared with an increase of 3.2 percent.
Real exports of goods and services increased 2.8 percent in the fourth quarter, compared with an increase of 4.5 percent in the third. Real imports of goods and services increased 8.9 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 12.5 percent, in contrast to an increase of 16.0 percent. Nondefense increased 1.7 percent, compared with an increase of 0.4 percent. Real state and local government consumption expenditures and gross investment increased 1.3 percent, compared with an increase of 1.1 percent.
The change in real private inventories added 0.82 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 $113.1 billion in the fourth quarter, following increases of $82.2 billion in the third quarter and $84.8 billion in the second.
Real final sales of domestic product -- GDP less change in private inventories -- increased 1.8 percent in the fourth quarter, compared with an increase of 5.0 percent in the third.
Gross domestic purchases
Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever produced -- increased 3.6 percent in the fourth quarter, compared with an increase of 4.1 percent in the third.
Disposition of personal income
Current-dollar personal income increased $136.8 billion in the fourth quarter, compared with an increase of $131.6 billion in the third. The acceleration in personal income primarily reflected accelerations in wages and salaries and in proprietors’ income that were partly offset by a deceleration in government social benefits to persons and a larger decrease in personal interest income.
Personal current taxes increased $32.0 billion in the fourth quarter, compared with an increase of $26.5 billion in the third.
Disposable personal income increased $104.8 billion, or 3.3 percent, in the fourth quarter, compared with an increase of $105.1 billion, or 3.3 percent, in the third. Real disposable personal income increased 3.8 percent, compared with an increase of 2.0 percent.
Personal outlays increased $120.4 billion in the fourth quarter, compared with an increase of $143.4 billion in the third.
Personal saving -- disposable personal income less personal outlays -- was $601.7 billion in the fourth quarter, compared with $617.2 billion in the third.
The personal saving rate -- personal saving as a percentage of disposable personal income -- was 4.6 percent in the fourth quarter, compared with 4.7 percent in the third. For a comparison of personal saving in BEA's national income and product accounts with personal saving in the Federal Reserve Board's financial accounts of the United States and data on changes in net worth, go to www.bea.gov/national/nipaweb/Nipa-Frb.asp.
Current-dollar GDP
Current-dollar GDP -- the market value of the production of goods and services in the United States -- increased 2.5 percent, or $110.9 billion, in the fourth quarter to a level of $17,710.7 billion. In the third quarter, current-dollar GDP increased 6.4 percent, or $271.6 billion.
2014 GDP
Real GDP increased 2.4 percent in 2014 (that is, from the 2013 annual level to the 2014 annual level), compared with an increase of 2.2 percent in 2013.
The increase in real GDP in 2014 reflected positive contributions from personal consumption expenditures (PCE), nonresidential fixed investment, exports, private inventory investment, state and local government spending, 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.
The acceleration in real GDP growth in 2014 reflected an acceleration in nonresidential fixed investment, a smaller decrease in federal government spending, and accelerations in private inventory investment, in PCE, and in state and local government spending that were partly offset by an acceleration in imports and a deceleration in residential fixed investment.
The price index for gross domestic purchases increased 1.4 percent in 2014, compared with an increase of 1.3 percent in 2013.
Current-dollar GDP increased 3.9 percent, or $652.6 billion, in 2014 to a level of $17,420.7 billion, compared with an increase of 3.7 percent, or $604.9 billion, in 2013.
During 2014 (that is, measured from the fourth quarter of 2013 to the fourth quarter of 2014), real GDP increased 2.5 percent, compared with an increase of 3.1 percent during 2013. The price index for gross domestic purchases increased 1.1 percent during 2014, compared with an increase of 1.3 percent during 2013.?
Source: U.S. Bureau of Economic Analysis · Original release Jan 30, 2015.
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