The Bureau of Economic Analysis (BEA) released its
“final” estimate of growth in the inflation-adjusted
(“real”) gross domestic product (GDP) for the 4^th
quarter of 2006 (at href="http://www.bea.gov/newsreleases/national/gdp/2007/pdf/gdp406f.pdf">http://www.bea.gov/newsreleases/national/gdp/2007/pdf/gdp406f.pdf
). 

lang=EN style='font-size:12.0pt;mso-ansi-language:EN'> 

lang=EN style='font-size:10.0pt;mso-ansi-language:EN'>GDP growth in the 4^th
quarter was estimated to have been an annualized 2.5%, an upward revision from
the earlier 2.2% “preliminary” estimate released on February
28. 

lang=EN style='font-size:10.0pt;mso-ansi-language:EN'> 

Highlights:

style='mso-default-font-family:Wingdings;mso-greek-font-family:Wingdings;
mso-latin-font-family:Wingdings'>Ølang=EN style='font-size:10.0pt;mso-ansi-language:EN'>    class=GramE>The upward revision to the percent change in real GDP
primarily reflected upward revisions to inventory investment and consumer
spending.  In contrast, investment in equipment and software was revised
down.

style='mso-default-font-family:Wingdings;mso-greek-font-family:Wingdings;
mso-latin-font-family:Wingdings'>Ølang=EN style='font-size:10.0pt;mso-ansi-language:EN'>    Real
GDP grew at an annualized 2.0% rate in the 3^rd quarter, 2.6% in the
2^nd quarter, and 5.6% in the 1^st quarter of last
year. 

style='mso-default-font-family:Wingdings;mso-greek-font-family:Wingdings;
mso-latin-font-family:Wingdings'>Ølang=EN style='font-size:10.0pt;mso-ansi-language:EN'>    Real
GDP increased at a robust 3.3% rate in 2006 (from the 2005 annual level
compared to the 2006 annual level).  In 2005, real GDP increased 3.2%.

style='mso-default-font-family:Wingdings;mso-greek-font-family:Wingdings;
mso-latin-font-family:Wingdings'>Ølang=EN style='font-size:10.0pt;mso-ansi-language:EN'>    The
acceleration to 2.5% annualized growth in the 4^th-quarter relative
to the 2.0% growth in the 3^rd quarter reflected accelerations in
consumer spending, exports, and Federal government spending and a downturn in
imports.  The effects on GDP growth of those accelerations were moderated
by downturns in inventory investment and equipment and software investment.

style='mso-default-font-family:Wingdings;mso-greek-font-family:Wingdings;
mso-latin-font-family:Wingdings'>Ølang=EN style='font-size:10.0pt;mso-ansi-language:EN'>    BEA
also released the first estimate of 4^th-quarter corporate
profits.  Corporate profits with inventory valuation and capital
consumption (depreciation) adjustments rose 18% in the 4^th quarter
of 2006 relative to the same quarter a year earlier.

style='color:blue;mso-ansi-language:EN'>Jeffrey Wraselang=EN style='color:blue;mso-ansi-language:EN'>

Chief Economist, Senate Republicans

Joint Economic Committee<

H-805 Hart w:st="on">Senate Office
Buildinglang=EN style='font-size:10.0pt;mso-ansi-language:EN'>

(202) 224-2335

jeff_wrase@jec.senate.gov