Growth Revised Upward To 5.9 Percent – Growth Still Primarily Due to Inventory Accumulation

Growth in GDP for the fourth quarter was revised up slightly to 5.9 percent at an annualized rate compared to 5.7 percent first reported. The revision was due to increases in exports, inventories and business investment. This offset an upward revision to imports and a downward revision to consumption. Growth was strong in the fourth quarter; however, the bulk of the expansion was still due to inventory accumulation by businesses, which added 3.9 percent to growth. Though this adds to output, it is largely temporary in nature as final demand for goods and services have not grown as greatly. Real final sales, which excludes inventories, and therefore measures demand for US output grew by a lesser 2.0 percent annualized. Until this number grows higher, recovery will remain modest.

annualized % change	Q4 2009	Q3 2009	Q2 2009	Q1 2009	Q4 2008	Q3 2008
Real GDP	5.9	2.2	-0.7	-6.4	-5.4	-2.7
% contribution to real GDP
Consumption	1.2	2.0	-0.6	0.4	-2.2	-2.5
Fixed Investment	0.8	-0.2	-1.7	-6.6	-3.3	-1.3
Residential	0.1	0.4	-0.7	-1.3	-0.8	-0.6
Non-Residential	0.6	-0.6	-1.0	-5.3	-2.5	-0.7
Inventories	3.9	0.7	-1.4	-2.4	-0.6	0.3
Government	-0.2	0.6	1.3	-0.5	0.2	1.0
Net Exports	0.3	-0.8	1.7	2.6	0.5	-0.1