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Historical release narrative reproduced from the official public-domain U.S. Bureau of Economic Analysis source. Statistical tables, charts, standard technical appendices and administrative material are omitted; formatting is adapted for reading. Figures retain the release's original vintage and may have been revised. Consult the linked source for the complete release and current data.
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 2.2 percent in the fourth quarter of 2014, according to the "second" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 5.0 percent.
The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month. In the advance estimate, the increase in real GDP was 2.6 percent. With the second estimate for the fourth quarter, private inventory investment increased less than previously estimated, while nonresidential fixed investment increased more (see "Revisions" on page 3).
The increase in real GDP in the fourth quarter reflected positive contributions from personal consumption expenditures (PCE), nonresidential fixed investment, exports, state and local government spending, private inventory investment, 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 acceleration in PCE, an upturn in private inventory investment, and an acceleration in state and local government spending.
_______ 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.
The price index for gross domestic purchases, which measures prices paid by U.S. residents, decreased 0.1 percent in the fourth quarter, 0.2 percentage point less of a decrease than in the advance estimate; this index increased 1.4 percent in the third quarter. Excluding food and energy prices, the price index for gross domestic purchases increased 0.7 percent, compared with an increase of 1.6 percent.
Real personal consumption expenditures increased 4.2 percent in the fourth quarter, compared with an increase of 3.2 percent in the third. Durable goods increased 6.0 percent, compared with an increase of 9.2 percent. Nondurable goods increased 3.8 percent, compared with an increase of 2.5 percent. Services increased 4.1 percent, compared with an increase of 2.5 percent.
Real nonresidential fixed investment increased 4.8 percent in the fourth quarter, compared with an increase of 8.9 percent in the third. Investment in nonresidential structures increased 5.0 percent, compared with an increase of 4.8 percent. Investment in equipment increased 0.9 percent, compared with an increase of 11.0 percent. Investment in intellectual property products increased 10.9 percent, compared with an increase of 8.8 percent. Real residential fixed investment increased 3.4 percent, compared with an increase of 3.2 percent.
Real exports of goods and services increased 3.2 percent in the fourth quarter, compared with an increase of 4.5 percent in the third. Real imports of goods and services increased 10.1 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 12.4 percent, in contrast to an increase of 16.0 percent. Nondefense increased 1.4 percent, compared with an increase of 0.4 percent. Real state and local government consumption expenditures and gross investment increased 2.0 percent, compared with an increase of 1.1 percent.
The change in real private inventories added 0.12 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 $88.4 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 2.1 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 3.3 percent in the fourth quarter, compared with an increase of 4.1 percent in the third.
Current-dollar GDP
Current-dollar GDP -- the market value of the production of goods and services in the United States -- increased 2.3 percent, or $101.5 billion, in the fourth quarter to a level of $17,701.3 billion. In the third quarter, current-dollar GDP increased 6.4 percent, or $271.6 billion.
Revisions
The "second" estimate of the fourth-quarter percent change in GDP is 0.4 percentage point, or $17.9 billion, less than the advance estimate issued last month, primarily reflecting a downward revision to private inventory investment and an upward revision to imports that were partly offset by upward revisions to nonresidential fixed investment and to state and local government spending.
Advance Estimate Second Estimate
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, state and local government spending, private inventory investment, 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 primarily reflected an acceleration in nonresidential fixed investment, a smaller decrease in federal government spending, and accelerations in PCE, in state and local government spending, and in private inventory investment 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 $650.2 billion, in 2014 to a level of $17,418.3 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 2.4 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 Feb 27, 2015.
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