Keeping you up to date on the latest data releases.
According to the advance estimate, real GDP increased at an annualized rate of 3.2 percent in the fourth quarter of 2013. Contributing to this increase were improvements to consumption, business investment, inventories, and net exports. The components that decreased in the fourth quarter were residential investment and government spending. During 2013, real GDP increased 1.9 percent overall. Personal consumption expenditures were a primary contributor to the improvement in real GDP during the fourth quarter. Consumption increased 3.3 percent in, which was the result of increases in all three of the major consumption categories. Durable and nondurable goods consumption increased 5.9 and 4.4 percent, respectively, while services consumption increased 2.5 percent. The increase in consumption was the largest since the fourth quarter of 2010, and consumption contributed 2.3 percentage points to real GDP growth, over half of the overall gain.
Business fixed investment increased 3.8 percent in the fourth quarter, contributing 0.5 percentage points to real GDP growth. Investment in equipment increased 6.9 percent and investment in intellectual property increased 3.2 percent. These gains were partially offset by a 1.2 percent decline in investment in structures. Additionally, inventory investment increased as well, contributing another 0.4 percentage points to the percent change in real GDP. Residential investment declined for the first time since 2010, as it fell 9.8 percent for the quarter. This reduction in residential investment subtracted 0.3 percentage points from overall GDP growth.
Government spending also fell during the fourth quarter, as it decreased 4.9 percent. The decline in government spending was the result of a 12.6 percent decline in federal government spending, as state and local government spending increased 0.5 percent. This reduction subtracted 0.9 percentage pointa from GDP growth for the quarter. A sizable increase in exports coupled with a modest increase in imports lead to a strong positive contribution from net exports to GDP growth. Exports increased 11.4 percent, the largest increase since the fourth quarter of 2010, while imports increased just 0.9 percent. This resulted in a quarterly contribution from net exports of 1.3 percentage points to GDP growth.