Growth during the quarter reflected positive contributions from private inventory investment, personal consumption expenditures (PCE), exports, residential fixed investment, and nonresidential fixed investment.   Those positive contributions were partially offset by negative contributions from federal government spending and state and local government spending.  Imports, which are a subtraction in the calculation of GDP, increased.

The acceleration in real GDP in the fourth quarter reflected an increase in private inventory investment and accelerations in PCE and residential fixed investment.    Those positives were offset by a deceleration in nonresidential fixed investment, a downturn in federal government spending, an acceleration in imports, and a larger decrease in state and local government spending.

Within the investment category, the increase in private inventories added 1.94 percentage points to GDP after subtracting 1.35 percentage points in the 3^rd-quarter.   It is unlikely that this level of increase in inventories will be sustainable in future quarters.

Private nonresidential fixed investment added 0.18 percentage points to GDP.  Within the category investment in structures subtracted 0.21 percentage points while investment in equipment and software added 0.39 percentage points.  Residential investment was also a positive contributor adding 0.23 percentage points.

PCE added 1.45 percentage points (grew at an annual rate of 2.0%) while the government sector subtracted 0.93 percentage points (declined at an annual rate of 4.6%).

The rise in GDP was slightly below expectations.  The consensus forecasts generally expected an increase of 3.0% or higher.   The estimate for 4^th-quarter 2011 GDP will be revised in both February and March.

BEA also estimates that real GDP increased at an annual rate of 1.7% during 2011 (the 2010 annual level to the 2011 annual level), compared with an increase of 3.0%in 2010.