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US gross domestic product (GDP) increased at an annual rate of 2.1 per cent in the fourth quarter (Q4) in the third or final estimate, unrevised from previous estimates, the US Commerce Department reported Thursday.
In the third estimate, an upward revision to personal consumption expenditures (PCE) was largely offset by downward revisions to federal government spending and non-residential fixed investment, according to a report released by the Bureau of Economic Analysis.
PCE grew at an annual rate of 1.8 per cent in the fourth quarter, slightly up from the 1.7 per cent in the second estimate, contributing 1.24 percentage points to the GDP in the quarter, reports Xinhua.
Nonresidential fixed investment, which reflects business spending, fell by 2.4 per cent in the fourth quarter, compared with a 2.3 per cent drop in the second estimate, taking off 0.33 percentage point from the GDP in the quarter.
The increase in real GDP in the fourth quarter reflected positive contributions from PCE, exports, residential fixed investment, federal government spending, and state and local government spending that were partly offset by negative contributions from private inventory investment and nonresidential fixed investment, the report showed. Imports, which are a subtraction in the calculation of GDP, decreased.
GDP growth slowed to 2.3 per cent in 2019, compared to 2.9 per cent in 2018, primarily reflecting decelerations in non-residential fixed investment and the PCE and a downturn in exports.
As the number of COVID-19 cases in the United States continues to climb, more and more state and local officials have closed nonessential businesses and ordered residents to stay home to slow the spread of the virus, effectively shutting down a significant part of the economy.
The number of initial jobless claims in the United States surged by 3 million to reach a record 3.3 million last week as COVID-19 devastates the economy, the US Bureau of Labor Statistics reported on Thursday.
A recent survey of 34 economists by The Wall Street Journal projected a downturn that would last months at least and would in some ways rival the severity of the global financial crisis in 2008.