Lots of real news--bad news in the "advance" GDP report for the fourth quarter of 2005:
News Release: Gross Domestic Product : EMBARGOED UNTIL RELEASE AT 8:30 A.M. EST, FRIDAY, JANUARY 27, 2006
Virginia H. Mannering: (202) 606-5304 BEA 06-02
Recorded message: (202) 606-5306
GROSS DOMESTIC PRODUCT: FOURTH QUARTER 2005 (ADVANCE)
Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 1.1 percent in the fourth quarter of 2005, according to advance estimates released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 4.1 percent. The Bureau emphasized that the fourth-quarter "advance" estimates are based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3). The fourth-quarter "preliminary" estimates, based on more comprehensive data, will be released on February 28, 2006.
The major contributors to the increase in real GDP in the fourth quarter primarily reflected positive contributions from private inventory investment, personal consumption expenditures (PCE), equipment and software, exports, and residential fixed investment that were partly offset by a negative contribution from federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.
The deceleration in real GDP growth in the fourth quarter primarily reflected a deceleration in PCE, an acceleration in imports, a downturn in federal government spending, and decelerations in equipment and software and in residential fixed investment that were partly offset by an upturn in private inventory investment.
Final sales of computers contributed 0.33 percentage point to the fourth-quarter growth in real GDP after contributing 0.16 percentage point to the third-quarter growth. Motor vehicle output subtracted 0.58 percentage point from the fourth-quarter growth in real GDP after contributing 0.56 percentage point to the third-quarter growth.
The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 3.3 percent in the fourth quarter, compared with an increase of 4.2 percent in the third. Excluding food and energy prices, the price index for gross domestic purchases increased 2.9 percent in the fourth quarter, compared with an increase of 2.5 percent in the third.