Gross domestic product (GDP) grew at a paltry 1.4% annual rate in 2000:IVQ. Despite this weak showing, the year still finished with a healthy fourth-quarter to fourth quarter growth rate of 3.5%. Major contributors to the deceleration were business fixed investment and personal consumption, which fell to –1.4% and 2.9% from their respective third-quarter growth rates of 7.7% and 4.5%. The trade balance also contributed to slower growth, as exports contracted 4.3%. These declines were partly offset by an upturn in government spending, which grew 2.9% after having fallen 1.4% in the third quarter. Blue Chip forecasters expect the downturn to be short lived; GDP growth should nearly equal its 30-year average by 2001:IIIQ.
Suggested citation: "Economic Activity," Federal Reserve Bank of Cleveland, Economic Trends, no. 01-02, pp. 10-11, 02.01.2001.