Real GDP grew at a seasonally adjusted annual rate of 1.9% during the fourth quarter of 2016, according to the Bureau of Economic Analysis’s “advance” estimate, down from 3.5% in the third quarter. The deceleration reflected a dip in exports, a rise in imports, a deceleration of PCE, and a slowdown in federal government spending. These were partly offset by an upturn in residential fixed investment, accelerations in nonresidential fixed investment and private inventory investment, and a rise in state and local government spending.
Consumption was the largest contributor to GDP growth, accounting for 1.7% of the gain, down from 2.0% during the third quarter. Consumption spending increased to an annual rate of $11.6 trillion, up $71.3 billion from the preceding quarter.
Fixed investment was a strong contributor, adding a total of 0.7% to GDP. Inventories were also a bright spot, contributing 1.0% of the growth.
Government spending increased during the quarter, as an increase in state and local government spending was slightly offset by a slowdown in federal government spending. Government spending increased by a seasonally adjusted and annualized $8.5 billion.
Net exports were the lone drag on growth, subtracting 1.7% from GDP.
Read the BEA release.