GDP report: Economy is growing

The fourth-quarter GDP report indicated that the economy is growing at a faster pace than originally thought, with real GDP increasing at an annualized rate of 3.0 percent from the third quarter of 2011.

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    This chart shows the annual and quarterly change in the US Real Gross Domestic Product (GDP) since 1999. Since contracting in 2008 and 2009, the economy is consistently expanding again.
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Yesterday, the Bureau of Economic Analysis (BEA) released their second "estimate" of the Q4 2011 GDP report showing that the economy continued to expand at a faster pace than originally estimated with real GDP increasing at an annualized rate of 3.0% from Q3 2011.

On a year-over-year basis real GDP increased 1.62% while the quarter-to-quarter non-annualized percent change was 0.74%.

The latest quarterly results indicate that the most notable source of weakness in the economy came from government defense spending which declined at a rate of 12.1% from Q3 while change in private nonfarm inventories made notable contributions accounting for 1.87% of the percent change of final real GDP while providing the majority of the 20.6% quarter-to-quarter rate of change for the entire Gross Private Domestic Investment category. 

That very same category also saw fixed residential investment expand at a rate of 11.5% while fixed non-residential structures declined at a rate of 2.6% over the same period.

Keep in mind that these results are likely very poorly estimated and are sure to be revised notably in following quarters and even years to come.

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