US Q4 GDP up 3.5 pct vs 3.0 expected, PCE price index down 0.8 pct UPDATE |
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Published
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Wed, 31 Jan 2007 15:10
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(Updating with recasts and additional details on housing market)WASHINGTON (AFX) - The US economy grew at a faster than expected pace at the end of the year, posting ist biggest annual gain in two years even as a measure of inflation fell for the first time in 45 years, the Commerce Department said today.The department estimated the economy grew at a 3.5 pct annualised rate between October and December, faster than the 3.0 pct economists had expected and faster than the 2.0 pct growth in the third quarter.The latest rise is the fastest pace since the first quarter, when the economy recorded 5.6 pct annualised growth.Notably, the increase came despite a 19.2 pct drop in spending on the housing market, the sharpest decline since 1991. For the full year, housing investment fell 4.2 pct, also the sharpest drop in 15 years.For the full year 2006, the economy grew by 3.4 pct, the fastest pace since 2004. In 2005, GDP rose by 3.2 pct.On a year-on-year basis, the economy also grew at a 3.4 pct pace in 2006, compared to 3.1 pct in 2005.Inflation, as measured by the PCE price index, fell 0.8 pct in the fourth quarter, the first decline since 1961. The decline is the sharpest since 1954. The PCE price index rose 2.4 pct in the third quarter.The Fed's preferred measure of inflation, the core PCE price index, which excludes volatile food and energy prices, rose 2.1 pct in the quarter, down slightly from the 2.2 pct rise in the prior quarter.Over the past 12 months, the core PCE price index has risen 2.3 pct, sharper than the 2.1 pct fourth quarter over fourth quarter figure in 2005.For all of 2006, the core PCE price index increased 2.2 pct, up from the 2.1 pct average increase in 2005.The overall PCE price index rose a revised 2.4 pct in the quarter, down slightly from the 2.5 pct estimated last month and sharply down from the prior quarter's 4.0 pct increase.Consumer spending, which accounts for as much as two-thirds of the economy, rose 4.4 pct in the fourth quarter, compared to the 2.8 pct increase in the prior three month period. That's the sharpest increase since the first quarter.Final sales rose 4.2 pct in the last three months of the year, sharper than the 1.9 pct rise in the third quarter.newsdesk@afxnews.comwash/ss/ssCOPYRIGHTCopyright AFX News Limited 2006. All rights reserved.The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
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Asian bourse roundup Thursday, January 25 2007 