GDP Growth Accelerated to 2.8% in Final Quarter of 2011

Real GDP growth accelerated to 2.8% SAAR in the fourth quarter, up from 1.8% growth in the third quarter according to the BEA’s initial estimate released today. Although the accelerating growth represents a solid trend, it is below the 3.2% growth forecast by ABA’s Economic Advisory Committee.

The accelerating growth was driven primarily by a large swing in inventories, which went from dragging 1.35% to aiding growth by 1.94%. This amounts to nearly two thirds of fourth quarter growth. Accumulating inventories may indicate a slowing of growth early this year.

Consumption also grew, and contributed 1.45% to growth, up from 1.24% in the previous quarter. Fixed investment slowed in the end of 2011, and contributed only 0.41% to growth. Both trade and government spending decreased, becoming drags on growth of 0.11% and 0.93% respectively.

Read the report.