FRANKFURT (Dow Jones) – The U.S. economy grew at the end of last year, thanks mainly to destocking slowed considerably stronger than expected. As the U.S. Department of Commerce as part of a first release announced on Friday, rose, real gross domestic product (GDP) from October to December at an annualized 5.7%. (B. Rude)
Economists polled by Dow Jones Newswires had expected a growth of 4.8%. In the third quarter U.S. GDP had grown by 2.2% after the second quarter, a decline of 0.7% was recorded. In the first quarter of the year, GDP had collapsed by 6.4%.
The reduction of stocks held in the fourth quarter though, but significantly decreased, so the stock changes with around 3.4 percentage points, the strongest contribution to GDP growth contributed. As announced, the Commerce Department, were reduced in the fourth quarter, only stocks of 33.5 billion USD, compared with 139.2 billion in the third quarter. Final demand, defined as GDP excluding changes in inventories, rose by only 2.2% annualized, after it was recorded in the third quarter, a growth of 1.5%.
Private consumption expenditure grew by 2.0% (previous quarter: up 2.8%) and yielded a growth contribution of 1.4 points. The gross capital formation increased by 29.3% (up 5.0%), its contribution to growth was 3.8 points. Investment in residential buildings rose by 5.7% (plus 18.9%) and yielded a growth contribution of 0.1 point. The net exports, GDP growth is supported with 0.5 points.
ING economist James Knightley said that the end of 2009 recorded growth would not be kept because the lending is in decline, households still have problems and the demand for labor is low. "While there is because of the evolution of the ISM index for manufacturing industry hopes for an annual GDP growth of 3%, but other leading indicators such growth shall not close," said the expert.
Said Matthias Huth from Landesbank Baden-Wurttemberg (LBBW), the GDP growth in the fourth quarter overestimates the true situation of the U.S. economy. "Firstly, the economic programs should not have contributed considerably to the recovery, on the other hand, the final demand grew by only 2.2% annualized," he explained. Nevertheless, was to be expected that the stock changes will also affect the first quarter, GDP again positive, "which includes our GDP forecast for 2010 from 2.0% upside."
By the U.S. Federal Reserve as an inflation measure favored deflator for personal consumption expenditures (PCE) rose by 2.7% after an increase of 2.6% in the previous quarter and an increase 1.4% in the second quarter. In the first quarter, the rate was minus 1.5%. The GDP deflator stood in the final quarter to plus 0.6% to plus 0.4% in the previous quarter. ING economist Knightley is clear with these numbers is that the Fed is not before the third quarter of 2010, proceed to a first rate hike.
In the full year 2009, the output of the U.S. economy fell by 2.4%. That was the biggest drop since 1946, when GDP fell by 10.9%.
By Hans-Bentzien, Dow Jones Newswires, +49 (0) 69 29725 300,
Hans.Bentzien @ dowjones.com
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