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THURSDAY, March 29, 2007 GDP GREW 2.5 PERCENT IN THE FOURTH QUARTER “Final” Estimates of GDP The economy grew at an annual rate of 2.5 percent in the fourth quarter, according to the “final” estimates released by the Bureau of Economic Analysis. The growth rate was 0.3 percentage point more than in the “preliminary” estimates released in February. In the third quarter, real gross domestic product grew 2.0 percent. For 2006, the annual growth rate was 3.3 percent, compared with 3.2 percent in 2005. Gross Domestic Product (GDP) The step up in fourth-quarter GDP growth primarily reflected accelerations in consumer spending, exports, and Federal government spending and a downturn in imports—moderated by downturns in investment in inventories and in equipment and software. The higher GDP growth rate, in comparison to the preliminary estimate, reflected upward revisions to inventory investment and consumer spending. In contrast, investment in equipment and software was revised down. Quarter-to-Quarter Growth in Real GDP 8 Percent 6 4 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. Corporate Profits BEA also released the first estimate of fourth-quarter corporate profits, which rose 18 percent from the same quarter a year ago. Profits of financial corporations increased 27 percent, and profits of nonfinancial corporations increased 9 percent. Year-over-Year Growth in Corporate Profits 30 25 Percent 20 15 10 5 0 I II III 2003 IV I II III 2004 IV I II III 2005 IV I II III IV 2006 Corporate profits growth is measured as the percent change from the same quarter one year ago. 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 “advance” estimate of GDP for the first quarter of 2007 will be released on April 27, 2007. Contact: Ralph Stewart 202–606–2649 Bureau of Economic Analysis, U.S. Department of Commerce