The U.S. Commerce Department’s Bureau of Economic Analysis (BEA) reported this morning that the nation’s real gross domestic product (GDP) increased by a tepid 0.7 percent in the fourth quarter of 2015.
That’s down from 2 percent growth in the third quarter and nearly 4 percent growth in the second quarter.
The softer economic output in the fourth quarter was primarily attributable to a decline in business investment. Business spending on equipment dropped by 5.3 percent while spending on structures fell 1.8 percent, primarily led by belt tightening in the energy industry, according to the BEA data.
In contrast, consumer spending grew at a 2.2 percent annual rate in the fourth quarter. However, that was weaker than the 3 percent increase posted in the third quarter.
The BEA defines real GDP as the value of the goods and services produced by the nation’s economy, minus the value of the goods and services used up in production, adjusted for price.
Today’s GDP estimate is subject to further revision by the BEA, as more updated information is incorporated. The bureau said it will issue a second estimate for fourth-quarter GDP on Feb. 26.
Contact Rombel at arombel@cnybj.com