Bureau of Economic Analysis: USA Quarterly GDP Estimate
USA 2010 Q4 GDP Second Estimate +2.8%
Official Statement by the Bureau of Economic Analysis is at bottom of this post.
USA GDP Q4 2010 Second Estimate The Bureau of Economic Analysis released the Second Estimate of 2010 Q4 GDP which was +2.8%, for a total GDP of $14.86 trillion (annualized). The prior advance estimate of Q4 2010 was +3.2% improvement over the 2010 Q3 GDP of +2.6%. So the second estimate was a downward revision of -0.4%. Q4 2010 GDP is below the Q1 2010 GDP of +3.7% and well below the Q4 2009 GDP of +5.0%. However the GDP has increased for 2 consecutive quarters and is an improvement on Q2 +1.7% and Q3 +2.6%.
USA GDP 2010 The Bureau of Economic Analysis second estimate of the 2010 GDP at +2.8% and $14.66 trillion, compared to -2.6% in 2009, 0.0% in 2008, and +1.9% in 2007. The USA annual GDP will be reviewed in a subsequent post.
GDP +3.0% Benchmark A +3.0% annualized GDP growth rate is generally accepted as the minimum necessary to generate some jobs growth. Therefore, the USA economy did not grow at a rate in Q4 2010 to create adequate jobs and bring down the true, not official, unemployment and underemployment rates. The Big Question: where is the USA economy headed? Three scenarios are usually discussed: 1) a double dip recession whereby the GDP will turn negative, 2) the economy will continue "bottom bouncing" with very slow growth and a continuing high unemployment rate (i.e., less than or near +3.0% growth), or 3) the bottom is in and GDP growth will accelerate to above +3.0% and continue above, jobs will be created, and the unemployment will continue to decrease. Scenario 2) with USA slow economic growth appears to be the consensus for 2011.
USA GDP % by Quarter (Chart) The chart below is the annualized percentage change of the GDP (seasonally adjusted at annual rate) from the preceding quarter (QoQ), the most common GDP measure. As can be seen, there was a negative dip into the Great Recession beginning 2008 Q2, a rebound peaking in 2009 Q4, a downward trend in 2010 Q1 and Q2. The USA economy appeared to be at a crossroads at 2010 Q2: a continuing downwards trend towards zero growth or a bounce upwards from there? The 2010 Q3 +2.6% was a bounce upwards and the 2010 Q4 +2.8% continues the small, but inadquate, uptrend. The Federal Reserve via the Federal Open Market Committee has resorted to QE2, a second round of quantitative easing, plus indirect quantitative easing in an attempt to boost the economy, increase the GDP, and bring down the unemployment rate. The chart covers the last 24 quarters of the USA GDP as reported by BEA from 2005 Q1 through 2010 Q4 (second estimate).
USA GDP $ by Quarter (Chart) The chart below is the GDP (seasonally adjusted at annual rate) in total current dollars. As can be seen, the USA economy peaked in 2008 Q3, bottomed in 2009 Q2, and now has increased 6 consecutive quarters. The Q4 2010 has exceeded both 2008 Q3 and the previous peak in 2010 Q3. The chart covers the last 24 quarters of the USA GDP as reported by BEA from 2005 Q1 through 2010 Q4 (second estimate).
The Bureau of Economic Analysis Commentary on the 4th Quarter and Annual 2010 (second estimate)
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 2.8 percent in the fourth quarter of 2010, (that is, from the third quarter to the fourth quarter), according to the "second" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 2.6 percent.
The GDP estimates released today are based on more complete source data than were available for the "advance" estimate issued last month. In the advance estimate, the increase in real GDP was 3.2 percent (see "Revisions" on page 3).
The increase in real GDP in the fourth quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, and nonresidential fixed investment that were partly offset by negative contributions from private inventory investment and state and local government spending. Imports, which are a subtraction in the calculation of GDP, decreased.
The small fourth-quarter acceleration in real GDP primarily reflected a sharp downturn in imports, an acceleration in PCE, an upturn in residential fixed investment, and an acceleration in exports that were mostly offset by downturns in private inventory investment and in federal government spending, a deceleration in nonresidential fixed investment, and a downturn in state and local government spending.
Final sales of computers added 0.30 percentage point to the fourth-quarter change in real GDP after adding 0.29 percentage point to the third-quarter change. Motor vehicle output subtracted 0.31 percentage point from the fourth-quarter change in real GDP after adding 0.49 percentage point to the third-quarter change.
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