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4th Quarter GDP Is Revised Up To 5.9%

A press release from the US Bureau Of Economic Analysis:

Gross Domestic Product: Fourth Quarter 2009 (Second Estimate)

February 26, 2010

Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 5.9 percent in the fourth quarter of 2009 (that is, from the third quarter to the fourth quarter) according to the "second" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 2.2 percent.

Note that the third quarter GDP had been initially estimated to be 3.5%.

The GDP estimates released today are 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 5.7 percent (see "Revisions" on page 3).

The increase in real GDP in the fourth quarter primarily reflected positive contributions from private inventory investment, exports, personal consumption expenditures (PCE), and nonresidential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.

The acceleration in real GDP in the fourth quarter primarily reflected an acceleration in private inventory investment, an upturn in nonresidential fixed investment, a deceleration in imports, and an acceleration in exports that were partly offset by decelerations in PCE and in federal government spending.

Motor vehicle output added 0.44 percentage point to the fourth-quarter change in real GDP after adding 1.45 percentage points to the third-quarter change. Final sales of computers subtracted 0.01 percentage point from the fourth-quarter change in real GDP after subtracting 0.08 percentage point from the third-quarter change.

The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 1.9 percent in the fourth quarter, 0.2 percentage point less than in the advance estimate; this index increased 1.3 percent in the third quarter. Excluding food and energy prices, the price index for gross domestic purchases increased 1.3 percent in the fourth quarter, compared with an increase of 0.3 percent in the third.

Real personal consumption expenditures increased 1.7 percent in the fourth quarter, compared with an increase of 2.8 percent in the third. Real nonresidential fixed investment increased 6.5 percent, in contrast to a decrease of 5.9 percent. Nonresidential structures decreased 13.9 percent, compared with a decrease of 18.4 percent. Equipment and software increased 18.2 percent, compared with an increase of 1.5 percent. Real residential fixed investment increased 5.0 percent, compared with an increase of 18.9 percent.

Real exports of goods and services increased 22.4 percent in the fourth quarter, compared with an increase of 17.8 percent in the third. Real imports of goods and services increased 15.3 percent, compared with an increase of 21.3 percent.

Real federal government consumption expenditures and gross investment increased 0.1 percent in the fourth quarter, compared with an increase of 8.0 percent in the third. National defense decreased 3.5 percent, in contrast to an increase of 8.4 percent. Nondefense increased 8.3 percent, compared with an increase of 7.0 percent. Real state and local government consumption expenditures and gross investment decreased 2.0 percent, compared with a decrease of 0.6 percent.

The change in real private inventories added 3.88 percentage points to the fourth-quarter change in real GDP, after adding 0.69 percentage point to the third-quarter change. Private businesses decreased inventories $16.9 billion in the fourth quarter, following decreases of $139.2 billion in the third quarter and $160.2 billion in the second.

Real final sales of domestic product — GDP less change in private inventories — increased 1.9 percent in the fourth quarter, compared with an increase of 1.5 percent in the third…

For once we know how it must feel to be an expert economist, since we are surprised at this news.

We had fully expected the GDP to be revised down, as it has usually been during the Obama administration. Such as what happened in the third quarter, which has been revised steadily down from 3.5 to 2.2%.

Of course, we still have our doubts about how significant any of these numbers actually are, since they are being artificially pumped up by massive government spending.

This article was posted by Steve on Friday, February 26th, 2010. Comments are currently closed.

6 Responses to “4th Quarter GDP Is Revised Up To 5.9%”

  1. JohnMG says:

    A replenishment of inventories would naturally require an increase in the production of goods, but unless those goods are sold, production will stagnate once again.

    My opinion is that the government is manipulating the marketplace and then using the numbers for political advantage.

  2. mr_bill says:

    4th Quarter GDP was unexpectedly revised up to 5.9% on reports that the federal government spent, borrowed, and printed more money than was previously estimated. The value of the dollar will be adjusted down accordingly.

  3. proreason says:

    Don’t forget that the increase is on a diminished base.

    And the the increase is due to replenishing warehouses, printing money, and confiscating income from future producers to bribe today’s slackers.

    And as Rusty said, they have, no doubt, fudged the data in ways we won’t learn about for months, if ever.

    • JohnMG says:

      …..”Don’t forget that the increase is on a diminished base……the increase is due to replenishing warehouses…..”

      My point exactly, pro. After all. an increase of one unit on a one-unit inventory is a 100% increase. Looks good on paper, but if the normal imventory is a thousand units, and you’re down to one……well, a one-unit increase ain’t squat. And it certainly isn’t an indicator of a mad rush toward prosperity.

      The spirit of ‘Baghdad Bob’ is alive and well at the US Bureau Of Economic Analysis.

  4. tranquil.night says:

    There’s no growth. No sector clearly has recieved any boost and general productivity has been trending much weaker than reported. It’s circling the drain, wall street knows it too. Even big government is starting to have to face the reality of massive lay-offs as the slush funds run out. The union’s are ticked because they feel betrayed sold out for the fatcats.

    But then again, when you have a banking/government alliance such as those partially public-owned banks maybe those GDP figures are real. Wouldn’t you know it, turns out AIG is still bleeding out. Unsurprising.

    Meanwhile a select few trading groups and hedges – multi-lateral – are taking larger and larger position sizes in every stock around the world. And their names keep popping up in defaulting nations everywhere.

    Numbers are cooked. All indicators are its more shams from the deciever.


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