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.

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.

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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