February 28, 2014

2.4 percent GDP growth in 4Q

March 3, 2014 – The second estimate for fourth-quarter gross domestic product growth was revised downward to a gain of 2.4 percent due in part to a smaller estimate of personal consumption, according to NAFCU Chief Economist and Director of Research David Carrier.

This followed 4.1 percent growth in the third quarter.

"Although the figure for overall GDP was revised downward, it evidenced solid growth and revealed that the economy is gathering steam," Carrier said analyzing data from the Bureau of Economic Analysis for a NAFCU Macro Data Flash report. "Fourth-quarter growth was driven by personal consumption, investment and exports, which should lead to further gains."

Also, the 4Q second estimate showed residential investment down 8.7 percent, nonresidential investment up 7.3 percent, consumer spending up 2.6 percent and government spending down 5.6 percent.

Core personal consumption expenditure inflation (excluding food and energy), the Fed's key inflation metric, decreased from 1.4 percent in the third quarter to 1.3 percent in the fourth quarter. Overall PCE inflation decreased from 1.9 percent in the third quarter to 1 percent in the fourth quarter.

"Overall, the economy expanded at 1.9 percent in 2013," Carrier said. "The economy is expected to improve over the next year as the labor market improves and fiscal headwinds subside."