The U.S. Commerce Department's final look at the 4th quarter economy shows an economy that continues to slow. The overall Gross Domestic Product (GDP) figure for the period has the economy growing at 1.0 percent, down from the initial 1.1% figure and less than the third quarters increase of 2.2 percent. The implicit price deflator for the 4th quarter was 2%. The GDP figures reflect the total output of goods and services produced in the U.S.
The 1.0% annual rate is the slowest since 1995. The main forces behind the increase were personal consumption expenditures (PCE), government spending and nonresidential structures. Weaker inventory accumulation is a promising sign for the 1st quarter of 2001. Decreases were also recorded in exports and in equipment and software investment. Imports, which are a subtraction in the calculation of the GDP, decreased.
The deceleration in real GDP in the 4th quarter primarily reflected the downturn in imports, in PCE for goods and nonresidential fixed investment that were partially offset by an upturn in federal government spending and an increase in PCE for services. PCE decelerated to a 2.8% annualized rate, the slowest since 1997. Consumption of services was strong at 4.1%, but was offset by a decline in durable goods and anemic growth in nondurables. The auto industry was hard hit with an annualized rate of decline of 10.9%.
Trade figures continue to acts as a break on the economy. Exports fell by 6.4% after two strong quarters and indicate that exports may not support the economy in the near future unless the dollar continues to weaken. Imports fell by 1.2%. The 2.1% decline in imported goods followed six quarters of double-digit growth.
Latest GDP Figures at a Glance
|4Q 1999||1Q 2000||2Q 2000||3Q 2000||4Q 2000|