U.S. GDP Grows 2.8 Percent in Q4 2011

Residential fixed investment grows 10.9 percent in quarter.

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 2.8 percent in the fourth quarter of 2011 (that is, from the third quarter to the fourth quarter), according to the "advance" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 1.8 percent.

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

The acceleration in real GDP in the fourth quarter primarily reflected an upturn in private inventory investment and accelerations in PCE and in residential fixed investment that were partly offset by a deceleration in nonresidential fixed investment, a downturn in federal government spending, an acceleration in imports, and a larger decrease in state and local government spending.

Final sales of computers added 0.18 percentage point to the fourth-quarter change in real GDP after adding 0.22 percentage point to the third-quarter change. Motor vehicle output added 0.30 percentage point to the fourth-quarter change in real GDP after adding 0.12 percentage point to the third-quarter change.

The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 0.8 percent in the fourth quarter, compared with an increase of 2.0 percent in the third. Excluding food and energy prices, the price index for gross domestic purchases increased 1.0 percent in the fourth quarter, compared with an increase of 1.8 percent in the third.

Real personal consumption expenditures increased 2.0 percent in the fourth quarter, compared with an increase of 1.7 percent in the third. Durable goods increased 14.8 percent, compared with an increase of 5.7 percent. Nondurable goods increased 1.7 percent, in contrast to a decrease of 0.5 percent. Services increased 0.2 percent, compared with an increase of 1.9 percent.

Real nonresidential fixed investment increased 1.7 percent in the fourth quarter, compared with an increase of 15.7 percent in the third. Nonresidential structures decreased 7.2 percent, in contrast to an increase of 14.4 percent. Equipment and software increased 5.2 percent, compared with an increase of 16.2 percent. Real residential fixed investment increased 10.9 percent, compared with an increase of 1.3
percent.

Real exports of goods and services increased 4.7 percent in the fourth quarter, the same increase as in the third. Real imports of goods and services increased 4.4 percent in the fourth quarter, compared with an increase of 1.2 percent in the third.

Real federal government consumption expenditures and gross investment decreased 7.3 percent in the fourth quarter, in contrast to an increase of 2.1 percent in the third. National defense decreased 12.5 percent, in contrast to an increase of 5.0 percent. Nondefense increased 4.2 percent, in contrast to a decrease of 3.8 percent. Real state and local government consumption expenditures and gross investment decreased 2.6 percent, compared with a decrease of 1.6 percent.

The change in real private inventories added 1.94 percentage points to the fourth-quarter change in real GDP after subtracting 1.35 percentage points from the third-quarter change. Private businesses increased inventories $56.0 billion in the fourth quarter, following a decrease of $2.0 billion in the third quarter and an increase of $39.1 billion in the second.

Real final sales of domestic product -- GDP less change in private inventories -- increased 0.8 percent in the fourth quarter, compared with an increase of 3.2 percent in the third.

Gross domestic purchases
Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever produced -- increased 2.8 percent in the fourth quarter, compared with an increase of 1.3 percent in the third.

Disposition of personal income
Current-dollar personal income increased $82.6 billion (2.6 percent) in the fourth quarter, compared with an increase of $24.3 billion (0.8 percent) in the third.

Personal current taxes increased $40.0 billion in the fourth quarter, compared with an increase of $12.3 billion in the third.

Disposable personal income increased $42.7 billion (1.5 percent) in the fourth quarter, compared with an increase of $11.9 billion (0.4 percent) in the third. Real disposable personal income increased 0.8 percent, in contrast to a decrease of 1.9 percent.

Personal outlays increased $69.9 billion (2.5 percent) in the fourth quarter, compared with an increase of $112.0 billion (4.1 percent) in the third. Personal saving -- disposable personal income less personal outlays -- was $429.3 billion in the fourth quarter, compared with $456.5 billion in the third. The personal saving rate -- saving as a percentage of disposable personal income -- was 3.7 percent in the fourth quarter, compared with 3.9 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 flow of funds accounts 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 nation's output of goods and services -- increased 3.2 percent, or $118.2 billion, in the fourth quarter to a level of $15,294.3 billion. In the third quarter, current-dollar GDP increased 4.4 percent, or $163.3 billion.

2011 GDP
Real GDP increased 1.7 percent in 2011 (that is, from the 2010 annual level to the 2011 annual level), compared with an increase of 3.0 percent in 2010.

The increase in real GDP in 2011 primarily reflected positive contributions from personal
consumption expenditures (PCE), exports, and nonresidential fixed investment that were partly offset by negative contributions from state and local government spending, private inventory investment, and federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.

The deceleration in real GDP in 2011 primarily reflected downturns in private inventory
investment and in federal government spending and a deceleration in exports that were partly offset by a deceleration in imports and an acceleration in nonresidential fixed investment.

The price index for gross domestic purchases increased 2.5 percent in 2011, compared with an increase of 1.5 percent in 2010.

Current-dollar GDP increased 3.9 percent, or $561.2 billion, in 2011, compared with an increase of 4.2 percent, or $587.5 billion, in 2010.

During 2011 (that is, measured from the fourth quarter of 2010 to the fourth quarter of 2011), real GDP increased 1.6 percent. Real GDP increased 3.1 percent during 2010. The price index for gross domestic purchases increased 2.5 percent during 2011, compared with an increase of 1.4 percent during 2010.

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