U.S. Q4 Economic Growth Revised Up To 1.7%

March 30, 2006
The U.S. economy expanded at a 1.7% pace in the fourth quarter of 2005, the government said March 30, in a slight upward revision of its previous estimate of 1.6% growth. The Commerce Department's third and final estimate of gross domestic product was in ...

The U.S. economy expanded at a 1.7% pace in the fourth quarter of 2005, the government said March 30, in a slight upward revision of its previous estimate of 1.6% growth. The Commerce Department's third and final estimate of gross domestic product was in line with expectations.

The report confirmed a sharp deceleration from the 4.1% growth pace in the third quarter, but analysts said the slowdown was linked to Hurricane Katrina and other onetime factors and that growth has picked up in 2006.

The figures from the Commerce Department close the books on 2005, showing growth for the year of 3.5%, compared with 4.2% in 2004 and 2.7 % in 2003.

The report showed corporate profits increased a record $185.8 billion at an annualized rate in the fourth quarter and were growing at the fastest pace in three years. The upward revision to GDP was due largely to higher inventory building by businesses, which offset lower consumer spending on services.

Final sales in the economy -- watched by experts because it shows growth excluding inventory building -- fell 0.2% in the quarter, the weakest performance since the first quarter of 2002. Consumer spending expanded at its weakest pace in 11 years.

Economists say the slump in the quarter was largely the result of temporary factors that have already faded, including the impact of Hurricane Katrina and the end of very generous sales incentives that boosted auto sales in the summer months.

Economists expect that the economy will show growth at a pace of at least 4% in the first quarter, which ends March 31, although that pace is expected to cool later in the year.

Copyright Agence France-Presse, 2006

Popular Sponsored Recommendations

The Benefits of Continuous Thermal Monitoring

Oct. 17, 2023
Read this eBook to learn more about collecting and using data intelligently to improve performance.

Process Mining For Dummies

Nov. 19, 2023
Here it is. Everything you need to know about process mining in a single book, written in the easy-to-understand, hard-to-forget style that ‘For Dummies’ manages so effortlessly...

State of Sales Report

Sept. 12, 2023
Discover the latest insights driving productivity and efficiency for more than 7,700 sales leaders and professionals.

Digitally Transforming Data and Processes With Product Lifecycle Management

Oct. 29, 2023
Manufacturers face increasing challenges in product development as they strive to consistently deliver improved results. Discover how industry leaders are improving time-to-market...

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!