Please ensure Javascript is enabled for purposes of website accessibility

Q4 GDP Growth Downsized to 2.4%

By Justin Loiseau – Feb 28, 2014 at 10:25AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A revision estimating less personal spending than previously thought brings the number down.

Real gross domestic product (GDP) increased at a seasonally adjusted annual rate of 2.4% for Q4 2013, according to a Commerce Department report (link opens as PDF) released today.

This second estimate number roughly represents the economic growth in the U.S. from the third quarter to the fourth quarter. The fourth quarter's first estimate clocked in at 3.2%, but analysts had already expected a downturn to 2.5%. A key reason for the downgrade from the first estimate to this one was that consumer spending is now estimated to have expanded at a 2.6% annual rate, below the initial estimate of 3.3% though still the strongest quarterly spending by consumers in nearly two years. 

US Real GDP Growth Chart

US Real GDP Growth data by YCharts.   

According to the report, the quarter's absolute GDP increase came primarily from personal spending, exports, nonresidential fixed investment, and private inventory investment.

Federal spending, residential fixed investment, and state and local spending all shrunk from Q3 to Q4, while private inventory investment growth slowed down. Imports, which are subtracted from total GDP, increased.

This latest report also publishes inflation numbers via the GDP Price Index. Inflation increased at a seasonally adjusted annualized rate of 1.6%, up from a previous 1.3% estimate and above analyst expectations of the same. 

While this second estimate is still based on incomplete data, the third and final report for Q4 numbers is scheduled to be published on March 27.

-- Material from The Associated Press was used in this report.


We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Related Articles

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.