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U.s. economy expands 3.2% in fourth quarter
Source: MarketWatch
The U.S. economy grew at a 3.2% annual pace in the fourth quarter, fueled by the biggest rise in consumer spending in three years and a snapback in business investment. Strong net exports also boosted growth, the Commerce Department s aid Thursday. Economists polled by MarketWatch had forecast a 3.3% gain in gross domestic product.
The largely positive fourth-quarter reading follows on the heels of a 4.1% increase in the third quarter, marking the best back-to-back growth since the end of 2011 and start of 2012. Consumer spending jumped 3.3% in the fourth quarter, the best performance since 2010. Business investment also rebounded - companies raised spending on equipment by 6.9% after a measly 0.2% increase in the third quarter.
Exports, meanwhile, jumped 11.4% while imports rose just 0.9%. Growth in the fourth quarter would have been stronger if not for the government shutdown in October. Federal spending sank 12.6%, overshadowing another increase in state and local spending. The housing market also became a drag on the economy for the first time in almost three years, as rising home prices and higher mortgage rates dampened demand. Residential construction outlays fell 9.8% on an annual basis. In a bit of a surprise, companies rapidly added to inventories again, perhaps a sign that they expect sales to strengthen in early 2014. Inventories climbed by $127.2 billion after a large $155.7 billion increase in the third quarter.
The annualized pace of inflation, as measured by the PCE index, rose a scant 0.7% in the fourth quarter. The core index rose 1.1%. For all of 2013 the U.S. grew just 1.9% compared to 2.8% in 2012, but the economy picked up lots of momentum in the second half of the year. Many economists believe that's a sign of things to come.
The largely positive fourth-quarter reading follows on the heels of a 4.1% increase in the third quarter, marking the best back-to-back growth since the end of 2011 and start of 2012. Consumer spending jumped 3.3% in the fourth quarter, the best performance since 2010. Business investment also rebounded - companies raised spending on equipment by 6.9% after a measly 0.2% increase in the third quarter.
Exports, meanwhile, jumped 11.4% while imports rose just 0.9%. Growth in the fourth quarter would have been stronger if not for the government shutdown in October. Federal spending sank 12.6%, overshadowing another increase in state and local spending. The housing market also became a drag on the economy for the first time in almost three years, as rising home prices and higher mortgage rates dampened demand. Residential construction outlays fell 9.8% on an annual basis. In a bit of a surprise, companies rapidly added to inventories again, perhaps a sign that they expect sales to strengthen in early 2014. Inventories climbed by $127.2 billion after a large $155.7 billion increase in the third quarter.
The annualized pace of inflation, as measured by the PCE index, rose a scant 0.7% in the fourth quarter. The core index rose 1.1%. For all of 2013 the U.S. grew just 1.9% compared to 2.8% in 2012, but the economy picked up lots of momentum in the second half of the year. Many economists believe that's a sign of things to come.
Read more: http://www.marketwatch.com/story/us-economy-expands-32-in-fourth-quarter-2014-01-30?dist=beforebell
I'm sure Faux will be working hard to downplay/ignore this news.
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