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WEDNESDAY January 30, 2008 GDP GROWTH SLOWS DOWN IN THE FOURTH QUARTER “Advance” Estimates of GDP Real gross domestic product (GDP) increased 0.6 percent in the fourth quarter after increasing 4.9 percent in the third quarter, according to estimates released by the Bureau of Economic Analysis. Annual growth in 2007 was 2.2 percent, compared with 2.9 percent in 2006. Annual Real GDP Growth Quarter-to-Quarter Growth in Real GDP 6 Percent 4 Percent 4 3 2 1 0 2004 2 2005 2006 2007 0 I II III 2004 IV I II III 2005 IV I II III 2006 IV I II III 2007 IV Real GDP growth is measured at seasonally adjusted annual rates. Fourth-quarter highlights • • • • Inventory investment turned down and reduced real GDP growth by 1.25 percentage points, after adding 0.89 percentage point in the third quarter. The downturn was mostly in motor vehicles inventories. Exports slowed, adding 0.46 percentage point to growth after adding 2.1 percentage points in the third quarter. Consumer spending decelerated, adding 1.37 percentage points to growth, compared with 2.01 percentage points in the third quarter. Housing investment continued to decline, subtracting 1.18 percentage points from GDP growth; in the third quarter, it subtracted 1.08 percentage points. Prices for personal consumption expenditures rose 3.9 percent, compared with 1.8 percent in the third quarter. Excluding food and energy, consumer prices increased 2.7 percent, compared with 2.0 percent in the third quarter. 2007 highlights Consumer spending on services, exports, and investment in business structures were major contributors to the 2.2 percent growth in real GDP in 2007. The continued drag from housing and a drawdown in inventories accounted for a significant share of the slowdown in growth compared to 2006. 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, 2008. Contact: Ralph Stewart 202–606–2649 Bureau of Economic Analysis, U.S. Department of Commerce
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