Real gross domestic product – the output of goods and services produced by labor and property located in the U.S. – increased at an annual rate of 3.2 percent from the third quarter to the fourth, according to the advance estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 4.1 percent.

The fourth-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency.  The second estimate for the fourth quarter, based on more complete data, will be released on February 28.

The increase in real GDP in the fourth quarter primarily reflected positive contributions from personal consumption expenditures, exports, nonresidential fixed investment, private inventory investment, and state and local government spending that were partly offset by negative contributions from federal government spending and residential fixed investment.  Imports, which are a subtraction in the calculation of GDP, increased.

The deceleration in real GDP in the fourth quarter reflected a deceleration in private inventory investment, a larger decrease in federal government spending, a downturn in residential fixed investment, and decelerations in state and local government spending and in nonresidential fixed investment that were partly offset by accelerations in exports and in PCE and a deceleration in imports.

The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 1.2 percent in the fourth quarter, compared with an increase of 1.8 percent in the third. Excluding food and energy prices, the price index for gross domestic purchases increased 1.7 percent in the fourth quarter, compared with an increase of 1.5 percent in the third.

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