The Bureau of Economic Analysis (BEA) released its advance estimate of growth in the inflation-adjusted (“real”) gross domestic product (GDP) for the 4^th quarter of 2010. (available here)

According to the advance estimate, annualized GDP growth in the 4^th quarter was 3.2%.   Growth in the 3^rd quarter was 2.6%, and 1.7% in the 2^nd quarter of 2010.   The BEA will release its second estimate for 4^th quarter GDP growth on February 25^th.

Highlights:

• The 3.2% rate of growth primarily reflected positive contributions from personal consumption expenditures (+4.4%), nonresidential fixed investment (+4.4%), exports (+8.5%), and a decline in imports (a subtraction from GDP).  These positive contributions were partly offset by a negative contribution from private inventory investment.
• The acceleration in GDP growth, from a rate of 2.6% in the 3^rd quarter, was due to a steep decline in imports (which fell 13.6%, compared to an increase of 16.8% in the 3^rd quarter), acceleration in personal consumption expenditures (up 4.4% compared to 2.4% in the 3^rd quarter), and an upturn in residential fixed investment (up 3.4% compared to a 3^rd quarter decline of 27.3%).  This momentum was partly offset by downturns in private inventory investment and federal government spending (down 0.6%), as well as a deceleration in nonresidential fixed investment (up 4.4% compared to 10.0% in the 3^rd quarter).   
  
  • The change in real private inventories subtracted 3.7 percentage points from the 4^th quarter change in GDP, compared to a positive contribution of 1.6 percentage points in the 3^rd quarter.