GDP Final Q4 Estimates show GDP increased by 3.1%, matching expectations, following a 2.8% estimated increase in the preliminary Q4 estimate (today’s release is based on a more complete set of data), after increasing by 2.6% in the third quarter and 1.7% in the second quarter. Consumer spending increased by 4.0%, lower than the earlier estimated 4.1%, contributing 2.8% to GDP over the quarter. However, this is still higher than 2.4% for the third quarter and the fastest increase since the first quarter of 2006. Corporate profits grew significantly in 2010, by 36.8%, the highest increase since 1950. The increase in real GDP in the fourth quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, and nonresidential fixed investment that were partly offset by negative contributions from private inventory investment and state and local government spending. Imports, which are a subtraction in the calculation of GDP, decreased. The fourth-quarter acceleration in real GDP primarily reflected a sharp downturn in imports, an acceleration in PCE, an upturn in residential fixed investment, and an acceleration in exports that were partly offset by downturns in private inventory investment, in federal government spending, and in state and local government spending, and a deceleration in nonresidential fixed investment.
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