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WEDNESDAY January 31, 2007 GROWTH ACCELERATES IN THE FOURTH QUARTER “Advance” Estimates of GDP Real gross domestic product (GDP) increased 3.5 percent in the fourth quarter after increasing 2.0 percent in the third quarter, according to estimates released today by the Bureau of Economic Analysis. Annual growth in 2006 was 3.4 percent, compared with 3.2 percent in 2005. Annual Real GDP Growth Quarter-to-Quarter Growth in Real GDP 8 5 Percent 4 Percent 6 3 2 1 0 4 2003 2004 2005 2006 2 0 I II III 2003 IV I II III 2004 IV I II III 2005 IV I II III 2006 IV Real GDP growth is measured at seasonally adjusted annual rates. Fourth-quarter highlights The fourth-quarter acceleration in GDP growth reflected the following: • • • Imports of goods turned down, while exports of services turned up. Consumer spending accelerated, mainly for food. Federal Government spending and state and local government spending both accelerated. In contrast, private investment declined 11.0 percent, compared with a 0.8-percent decline in the third quarter. Prices for personal consumption expenditures decreased 0.8 percent, compared with an increase of 2.4 percent. Excluding food and energy, prices increased 2.1 percent, compared with 2.2 percent. Real disposable income increased 5.4 percent in the fourth quarter, following an increase of 4.1 percent. 2006 highlights The acceleration in GDP growth in 2006 mainly reflected an upturn in inventory investment and accelerations in exports, in nonresidential structures, and in state and local government spending that offset a downturn in residential investment. BEA data—including GDP, personal income, the balance of payments, foreign direct investment, the input-output accounts, and economic data for states, local areas, and industries—are available on the BEA Web site: www.bea.gov. E-mail alerts are also available. NOTE: The “preliminary” estimate of GDP for the fourth quarter will be released on February 28, 2007. Contact: Ralph Stewart 202–606–2649 Bureau of Economic Analysis, U.S. Department of Commerce