Real GDP grew at a seasonally adjusted annual rate of 2.1% during the fourth quarter of 2019, according to the Bureau of Economic Analysis’s “advance” estimate, the same growth rate as in the third quarter of 2019. Total GDP growth for the year was 2.3%, down slightly from 2018.
Real GDP growth in the fourth quarter was driven by a decrease in imports, stronger government spending, and a positive, but slower rate of growth in consumer spending. These contributions were partly offset by a large decrease in private inventory investment and a decline in business investment.
Consumption decelerated, accounting for only 1.20 percentage points (pp) of the gain, down from 2.12 pp during the third quarter. Residential investment was a positive contributor to growth for the second straight quarter, adding a total of 0.21 pp to GDP. Inventories subtracted from growth for the third straight quarter, subtracting 1.08 pp from GDP in the fourth quarter.
Business investment was negative for the third consecutive quarter, subtracting 0.20 pp from GDP growth. Investment in structures and equipment continues to decline, but investment in intellectual property products remains positive.
Government spending continues to be a positive for growth, adding 0.47 pp to GDP. The gain was split evenly between federal and state and local government.
Read the BEA release.