U.S. gross domestic product (GDP) increased at an annual rate of 2.1 percent in the fourth quarter in the third or final estimate, unrevised from previous estimates, the U.S. Commerce Department reported Thursday.
In the third estimate, an upward revision to personal consumption expenditures (PCE) was largely offset by downward revisions to federal government spending and nonresidential fixed investment, according to a report released by the Bureau of Economic Analysis.
PCE grew at an annual rate of 1.8 percent in the fourth quarter, slightly up from the 1.7 percent in the second estimate, contributing 1.24 percentage points to the GDP in the quarter.
Nonresidential fixed investment, which reflects business spending, fell by 2.4 percent in the fourth quarter, compared with a 2.3 percent drop in the second estimate, taking off 0.33 percentage point from the GDP in the quarter.
The increase in real GDP in the fourth quarter reflected positive contributions from PCE, exports, residential fixed investment, federal government spending, and state and local government spending that were partly offset by negative contributions from private inventory investment and nonresidential fixed investment, the report showed. Imports, which are a subtraction in the calculation of GDP, decreased.
GDP growth slowed to 2.3 percent in 2019, compared to 2.9 percent in 2018, primarily reflecting decelerations in nonresidential fixed investment and the PCE and a downturn in exports.
As the number of COVID-19 cases in the United States continues to climb, more and more state and local officials have closed nonessential businesses and ordered residents to stay home to slow the spread of the virus, effectively shutting down a significant part of the economy.
The number of initial jobless claims in the United States surged by 3 million to reach a record 3.3 million last week as COVID-19 devastates the economy, the U.S. Bureau of Labor Statistics reported on Thursday.
A recent survey of 34 economists by The Wall Street Journal projected a downturn that would last months at least and would in some ways rival the severity of the global financial crisis in 2008.
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