Final Gross Domestic Product (GDP) Estimates Released Today for Q4 2005

The final estimates of real U.S. Gross Domestic Product (GDP) for the fourth quarter of 2005 were released this morning:

Consensus: +1.7%
Actual: +1.7%

The above percentages represent the quarter-to-quarter change in the Gross Domestic Product for the United States. The "consensus" is what economists were expecting, while the "actual" is the actual or real figure. The GDP report is produced by the U.S. Commerce Department's Bureau of Economic Analysis.

The GDP is a very broad measure of economic activity for the entire United States, covering all sectors of the economy. The Commerce Department defines real GDP as, "the output of goods and services produced by labor and property located in the United States."

Here's a snippet from a press release issued by the Commerce Department this morning:

"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 1.7 percent in the fourth quarter of 2005, according to final estimates released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 4.1 percent.

The GDP estimates released today are based on more complete source data than were available for the preliminary estimates issued last month. In the preliminary estimates, the increase in real GDP was 1.6 percent (see 'Revisions' on page 3).

The increase in real GDP in the fourth quarter primarily reflected positive contributions from private inventory investment, personal consumption expenditures (PCE), exports, equipment and software, 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 inventory investment and an acceleration in exports.

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 0.64 percentage point from the fourth-quarter growth in real GDP after contributing 0.56 percentage point to the third-quarter growth.

FOOTNOTE.--Quarterly estimates are expressed at seasonally adjusted annual rates, unless otherwise specified. Quarter-to-quarter dollar changes are differences between these published estimates. Percent changes are calculated from unrounded data and annualized. 'Real' estimates are in chained (2000) dollars. Prices indexes are chain-type measures."

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